Bob Schieffer's question about the solvency of the Social Security system is a good one. But if Uncle Sam is going to go another trillion dollars or so into debt (on the pretense of "stimulating" the economy), whether he does so by borrowing this $trillion in order to increase his spending by that amount, or by eliminating roughly a trillion dollars of payroll taxes for a year while keeping his spending unchanged, makes no difference on the solvency front. Either way, the federal government incurs debt of another $trillion or so.
If ordinary Americans truly are struggling to pinch pennies these days, there should be little worry, even for a Keynesian, that the extra money workers get from a suspension of their payroll taxes won't be spent. However, if you're a politician, the ways private citizens will spend these monies are not under your control — a fact that renders the political class terribly allergic to Michelle's plan.
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While Social Security is one of the many distortions and corruptions created by the Government (with the lusty support of the public, I might add), it is oddly one of the easiest problems conceptually to solve.
Lets suppose for a minute, that the public really did care about the long term deficits of the US. One of the most efficient ways to lower them would be to lower the growth rate of SS; perhaps to the "lower of X inflation measure and income growth". The "pain" would be marginal.But the AARP crowd (I am in that age category) would faint out of faux outrage if we tried it.
While I am pretty angry over what our Government is currently doing, don't we deserve the Government we get?
How ridiculous! Look at all the beancounters losing their gainful employment when there is no more payroll tax (i.e. no more beans to count)!
We can't be putting government workers out of work, can we?
She says hers is an alternative to Congress' stimulus plan. You write of the Obama scheme. She also failed to put the word stimulus in scare quotes.
Will you be sending her a memo on style?
Naive socialist drivel!
Walmart shoppers don't start companies and boost the American economy. What WOULD help is tax deductions per job created, and a flat tax, so that everybody works the same number of days per week for taxes. Penalizing hard work and entrepreneurship is no incentive, no stimulus.
The only things the government could really do to stimulate the economy are
1. A moratorium on government borrowing (offset by cuts in government spending and sale of government assets).
2. Tax simplification incorporating sufficient tax cuts to ensure nobody's taxes substantially increase (offset by cuts in government spending and sale of government assets).
3. Regulatory compliance simplification.
"The average fiscal multiplier across all 43 recession episodes is -1.5." –IMF p.17
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=879624
Wealth is created by trading up, not by transferring or spending money.
My plan is to drop the cap and lower the rate to 3%. Then pay out benifits based on hours worked independent of wages or contributions made
"pay out benifits … independent of … contributions made"
Gee. That really sounds fair. Throw in a few additional penalties on my income and you've got a deal!
Schieffer looked like he was trying to pass a kidney stone as he thought of the idea that people might actually keep some of their own money.
Something for nothing! Oh yeah, keep the money you've earned and you're getting something for nothing.
From where are these assholes dug up?
From the same place muirduck was dug up, I guess.
muirduck, you simpleton, don't you realize that this:
"My plan is to drop the cap and lower the rate to 3%. Then pay out benifits based on hours worked independent of wages or contributions made
Posted by: muirgeo | Feb 21, 2009 4:24:59 PM"
would ensure that 90% of those socialist deadbeats you love would not receive a penny if the receipt of benefits depended upon hours worked?
Actually it just might be the most intelligent idea you've ever advanced for that simple reason.
Muir,
You thieving scoundrel, grow a pair.
Say Don, you would not happen to have Michelle's phone number, would you?
JUST KIDDING!
/not really
Is that how it looks in all of your classes? Sign me up. Yes, I am a pig and I know it.
If she were not so smart, I would only look once, however.
Seriously now, her plan is timely and temporary. It is not so targeted in the sense that it only broadly impacts 80% of the economy. That means the entire private sector, by the way.
The only flaw in her plan is that it is Democratic and does not appeal to special interests, which is why it is sneered at in Washington.
Everyone…
Look at this if you have not.
http://www.youtube.com/watch?v=uyPcRGvtu18
btw, is it me or was Bob Schieffer as smitten as a kitten?
"lower of X inflation measure and income growth"
You could do that, but you would run into the most amusing phenomenon. To wit, persons of a certain political persuasion would oppose you by simultaneously arguing that
a) COLAs based on inflation rather than income constitute a decrease in benefits that would impoverish our elderly, and
b) personal incomes are stagnant and haven't kept up with inflation
Actually it just might be the most intelligent idea you've ever advanced for that simple reason.
No joke. I thought it was pretty good myself, although it magnifies the already distorted incentive people who make a large impact have to structure their incomes away from payroll and into capital gains and dividends. Benefits based on hours worked, though… not as good as "no benefits for anyone" but for sure a step in the right direction.