In less than three minutes, my former GMU student Michelle Muccio explains her "People's Stimulus" in this entertaining and smack-on video.
What say you, Pres. Obama?
Eliminate Payroll Taxes
Share
Previous post: Do the math
Next post: The costs of monitoring
{ 39 comments }
Congratulations to Michelle for the video but the idea is certainly nothing new.
If you don't give it to them, they can't squander it. (Of course the implication is that you have it to spend yourself, your way.)
What have I been saying with the regularity of a metronome for the last year.
Not being bitter at all, as a matter of fact I will ensure my e-mail list receives the link.
Michelle makes the point even more valid by forcing the people to think of the question of who can spend the individual's money better, themselves or the government. Suddenly they understand to a depth they were missing before.
I like this video for two reasons:
* It's in today's style and language so anybody can understand it
* It's the pragmatic way to combat the problem of creeping socialism…attack on the fringes step by step.
Under this proposal, where does the Social Security Administration get the revenue to replace the payroll taxes for the year? 1) Does the SSA redeem bonds from the "trust fund", thus requiring Congress to raise the revenue by selling more bonds to Goldman Sachs to resell to the Fed to provide the revenue, or 2) does Congress sell more bonds to Goldman Sachs to resell to the Fed to provide the revenue providing the benefits plus add more bonds to the "trust fund"?
In other words, does this proposal charge its current cost against future payroll tax revenue (first option) or future income tax revenue (second option)?
I favor eliminating the payroll tax altogether, but I don't favor eliminating my obligation to support aging parents who supported me, the tradition that Social Security actually replaced and still effectively replaces, albeit very inequitably.
The "private accounts" con game, wherein I buy entitlement to rents imposed on other people's children to avoid my children's obligation to support me, is no more attractive to me, as an alternative to Social Security, than the SS program itself In fact, it's worse. After all, other people also buy rents imposed on my children.
These rents are the problem, not the solution, because they aren't real yields of real investments. On the contrary, my support of my children is real investment with a real yield. Denying this reality doesn't change it.
From the link above:
Note that I wrote this proposal nearly ten years ago. The payroll tax surplus peaked last year. The increasing demands on other revenue has already begun, and we're so deeply in denial that we can't even bring ourselves to discuss the predicament.
Wow, sit this economist next to Dr. Krugman for a debate, and she wins before she even opens her mouth!
Martin,
"where does the Social Security Administration get the revenue to replace the payroll taxes for the year?"
Borrow it from our children and grandchildren, of course. Not seeing how borrowing it from the Social Security program is any different than issuing treasuries. They can make payments out of the "trust fund" for a couple of years
Finally, a hot economist on TV. Michelle, keep up the good work and join the main stream media. Then spread the liberty. Thanks.
I agree with the previous sentiments. The cause of economic liberty needs more spokespeople like Michelle. Nothing against Arnold Kling or anything…
Part economist. Part rabble rouser. All hottie.
When is the EconTalk VIDEO episode lined up?
These rents are the problem, not the solution, because they aren't real yields of real investments. On the contrary, my support of my children is real investment with a real yield. Denying this reality doesn't change it.
Yes Martin, you've got that nail down solid.
What a great video. She is indeed very pretty and pretty women usually get a lot of attention, so I hope she makes more videos.
However, I think a permanent cut in payroll taxes is a better idea.
Here's another idea. For every company that laid off a worker, give that company the laid off worker's unemployment compensation check to hire the worker back.
No net increase in government spending – dollar just goes from Fed instead of from state.
IMMEDIATE increase in jobs, jobs, jobs.
Actual increase in FICA and Medicare tax receipts to Fed gov.
Actual increase in income tax to Fed Gov.
Fed gov has to give less to state gov.
Why won't it happen? Cause it would increase the profits of private businesses. Democrats in control of Congress hate private business.
Too outside the beltway (i.e. too much common sense).
Shalom,
Good video, though I'm disappointed by the number of comments referencing the interviewer's looks. The comments here are typically much more thoughtful.
Obama says you are not being bipartisan and you're being ideologically rigid.
And besides that, _all_ economists disagree with you.
That's what Barack says.
Barack says your ideas were failed during the last 8 years.
Best looking economist I've ever seen.
Guest,
Since most of the commenters here are men and most of the female economists look a lot more like Christine Romer, I think they're just stunned. Give 'em a break.
You can't justify cutting ANY taxes if you won't cut spending. In fact the intellectually honest thing to do is massively increase taxes to cover our out of control spending. Just go to any random neighbor and ask them which government programs they would cut. I guarantee you once you get down to specifics(oh so you're going to deny health care to needy children), nobody is willing to cut anything.
Why not give the employers' matching portion to the employees as well? Why is the boss the one who always "creates jobs." Maybe with a little extra cash the employee can start a little business of her own. I must add though that most small business people are crooks. At least the ones I come across…
Mezzanine,
"…nobody is willing to cut anything."
You're probably right concerning the general population, but personally, I'm for making every last program voluntary. If they really want it, they'll be willing to pay for it.
TrUmPiT – do you have any idea what is the average amount of capital needed for a startup business(not MLM)? I mean a real business selling real goods or services. We're probably talking $50-$100K. That "small amount" of cash won't buy a pot to piss in. Besides most people aren't cut out to be small businessmen.
Randy – nice fantasy, how about some reality? 99% of the people want a "free lunch". Just about all my neighbors want "free health care" because it's "fair". Try convincing them that they should pay for their own "god given rights".
Mezzanine,
That's the nature of man – unlimited wants and needs. Of course nobody wants to cut programs. But, I'd prefer if everyone paid for their own intellectual honesty. I'm willing to reach into my pocket and fund more programs and more efficiently if government would stop dipping into it first to force me to pony up $1 for programs where only $0.01 ever filters down to the beneficiary of said program.
Methinks – you mean most people? Because while I also have unlimited wants and needs, I understand that I have to work to get a subset of those and be happy with it. I wonder how most people got the impression that they don't have to earn it other then voting in the right politicians.
Methinks,
Though it appears this person is not actually a real economist, you make a fine, realistic point.
And I do always enjoy your thoughtful comments here.
Cheers
From the politicians, Mezzanine.
Methinks – that sounds like a utopia. Meanwhile in the real world, we're hurtling at light speed towards the Sovietization of the USA.
Michelle Muccio is precisely the reason why I refused to become a college professor. Too much temptation! I'd hurt my self looking at a woman like for three hours a week. And I don't even want to think of having to suffer through office hours with her. Goodness gracious.
Are you proposing that federal government shut down for a year so people don't have to pay taxes? That would be ridiculous because the burden on the states would rise exponentially due to the loss of federal aid and subsidies. Your state taxes would rise exponentially based on your state. Most republican states would be hit hardest since they receive the most federal funding per dollar in federal taxes paid.
If people want to poop and flush the toilet in their home and want the poop to disappear they have to pay money for that infrastructure to be maintained. If you want to drive on bridge without it collapsing you have to pay money for that.
Say the government took out a loan for $800 billion and distributed it to people based on federal taxes paid as opposed to using it as the current stimulus bill proposes. You are basically banking on a trickle down Reaganomics, which has been proved to be a massive failure and a windfall for the richest in our country. People who were unemployed would receive nothing and would be begging for the scraps of the richest 1%. This is basically what got us to this point of financial ruin in the first place. You'd also have to hope that all the banks didn't become insolvent. If you have $50k in your retirement account and that disappears because your financial institution went belly up and FDIC becomes insolvent that wouldn't be good. I'd rather pay my federal taxes to keep my money safe. It's better than reverting to a collapsed economy where we revert to a bartering system.
Also, pumping money into this fundamentally broken economy is just delaying the inevitable collapse. The American economy has to be redirected which is what this stimulus does with rewriting our energy policy and reinvesting in education which would hopefully eliminate all these stupid idiots who took out loans and credit cards they couldn't afford and drove our economy into the ground.
Hey nobody likes to pay taxes, but I’d rather pay to live in a capitalist society then live in an anarchist state or under marshal law.
This channel is just a viral Republican ploy for the dummed masses. Remember, there are only two types of Republicans… millionaires and suckers.
The only problem is…… and it's a big one:
This would sink the good ship USS SocialSecurity/Ponzi
scheme.
Mezzanine,
"I wonder how most people got the impression that they don't have to earn it other then voting in the right politicians.
Posted by: Mezzanine | Feb 12, 2009 2:34:32 PM"
A rhetorical question, surely?
Stupid Idea,
Since we don't have room for a whole lot of idiots here, why not contact STrUmPiT offline and you two discuss your brilliant insights. That leaves the blog free for intelligent conversation between educated people.
Thank you very much.
Thank you, Guest.
"Are you proposing that federal government shut down for a year so people don't have to pay taxes?"
No.
"eliminate all these stupid idiots who took out loans and credit cards they couldn't afford and drove our economy into the ground."
I thought you said it was "trickle down" "Reaganomics" that caused the current crisis. Speak out of both sides of your mouth much?
"I’d rather pay to live in a capitalist society then live in an anarchist state or under marshal law."
The people here proposing anarchism are your straw-men. Enjoy your conversations with them.
The only* people here…
"That leaves the blog free for intelligent conversation between educated people." – vidyohs.
Nah! It just leaves more room for Libertarians to engage in mutual back-patting.
Methinks on 02-12-09 @ 10:36:01 AM
"However, I think a permanent cut in payroll taxes is a better idea."
I totally agree… Can you imagine what would happen after a year of not paying the payroll tax and all of a sudden the feds went back to wetting their beaks on this revenue stream?
TrUmPiT on 02-12-09 @ 12:58:44 PM
"I must add though that most small business people are crooks. At least the ones I come across…"
Funny, that how I feel about government bureaucrats.
Given the Total Income Hypothesis, wouldn't this money be saved or used to pay creditors more than spent? I mean, last year's tax rebate didn't do anything.
But I do like that it gets people talking about reducing taxes and who spends money better.
And I'm really POed that Jacob's Third Law of Economics has been hereby debunked. For those who don't know, it was "All economists are either beard-faces or leprechauns."