Retiree Ponzi Scheme $16 Trillion Short: Laurence Kotlikoff
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It is painful for me to say this, but again I find myself agreeing with you, and at the same time realize the impossibility. What would be possible, however, would be to cut defense spending down to the average per capita of all other developed nations and use some small fraction of the money saved to greatly improve public grade schools across the nation by drastically lowering class size in K through the 4th grade, hiring more and better qualified teachers at higher pay, and emphasizing math and language skills, music and art in the early years, and delaying science, civics and history for later on. Better educated citizens will mean more informed voters.
We also drastically need to amend the first amendment so that corporations are no longer people, and political patronage can be eliminated.
I have a radical economist friend who says we should tear up the constitution and start over. Perhaps he is right!
Chances are every thing of substance that is done from here on out will be done democratically, i.e., by committee and consensus, and where a consensus is not obtainable, nothing will be done. We are doomed by the structural defects in our political system to a slow slide into hopeless mediocrity. This will be our lot for many years to come. A perfect example of the dilemma U.S citizens face is the newly passed Health Care Bill (and I suppose the Financial Reform Bill would be another). The Bill ended up being neither fish nor foul. Not good, not terribly bad. It will drastically reduce the number of uninsured, but does practically nothing to reduce out of control costs. In fact the cost problem will likely be exacerbated. This is the kind of mediocre result we can expect from here on out. Every initiative that could really make a difference will be diluted down, by one side or the other, to the point of near uselessness.
I found this article both interesting and constructive and to incorporate some very good ideas. Norway, by the way, invests their public retirement funds much in the way the author suggested. Their Central bank manages the fund.
I don't think the idea, however, of letting unused contributions become part of a persons estate is a good one, even though it has great appeal, as in " it's my money, I should get to pass it on to my heirs if I should die young." This would essentially mean that your government guaranteed retirement program was a defined contribution plan. And that would mean that you would have to contribute far more to the plan to be guaranteed that you could not outlive your benefits. Those at the lower end of the wage scale could not afford this. I much prefer the present social security arrangement of defined benefit and shared risk, so you have to contribute much less for a given benefit that you can not outlive. But of course the trade-off is you won't leave anything to your heirs.
There really is not a problem for the upper middle class and wealthy. We can easily afford our rather modest Social Security contributions and also generously fund a private supplemental retirement plan of our choosing. But pity the poor who must rely solely on social security and can afford to contribute relatively little. It is not in the best interest of those rather well-off, like myself, to create a system that could put thousands of elderly people on the street eating cat food.
In the ideal world we would all make plenty of money and be capable of taking care of ourselves. Unfortunately there seems to be a shortage of ideal people.
Just a point to consider. Heavy deficit spending by the government combined with reduced taxes, which of course tends to exacerbate deficits, may generally be expected to increase revenues, depending on how the government spends its revenue. When this policy is continued for a number of years, and assuming a deep recession does not occur, inflation will very likely also contribute to an increase in government revenues as income moves up into higher brackets and corporation earnings inflate. While deficits do not have to lead to inflation, they certainly can, at least to the extent that debt is monetized.
(I like your suggestions, but not the idea of tariffs.)
7.65% times two = 15.3%, up to 106k this year.
The solutions to SS are simple and uncomplicated, for the retiree part:
1 - Eliminate the cap, so that all of a person's salary is covered. If the usual idiots whine, throw 'em a bone, but all of a person's salary should be covered. No other country on the planet funds their retirement system through a regressive tax. It's dumb, and is a subsidy to Wall Street. Wall Street, you say? Yes, Wall Street: Goldman Sachs has way more employees over the limit than Wal-Mart or just anybody else, which means Goldman Sachs as a corporate entity pays way less in relation to its revenues in SS tax than does Wal-Mart. This is insane.
2 - Start indexing benefits to inflation, rather than salary growth.
Number two is something very few people know about. The benefits you start out with are based on the SSA's determination of the average salary for that year. Despite the usual rantings of the usual gloomers and doomers, this figure typically runs ahead of inflation, and over time it runs well over inflation. Note carefully: once you start getting payments those payments are indexed to inflation. But the starting level is indexed to an average of salaries paid.
Reducing this so that the starting level is indexed to inflation only will gradually bring down SS payments relative to most person's salaries, so that in a generation or three it will be back to being merely last-ditch insurance against total penury, which is what it was intended and designed to be.
piezoe wrote , in part---
""use some small fraction of the money saved to greatly improve public grade schools across the nation by drastically lowering class size in K through the 4th grade, hiring more and better qualified teachers at higher pay, and emphasizing math and language skills, music and art in the early years, and delaying science, civics and history for later on. Better educated citizens will mean more informed voters.""
Education, and respect for learning, (or anything) begins at the family level.
Dismantle the family, or at least the cultures' perception of the NEED for traditional families, and you've dismantled the very foundations of our nation. Doesn't have to be a Mommy and a Daddy that love and respect each other, altho that's ideal. One half decent adult in the home, who tries as hard as they can, every day, will make more difference in the life of a child than any brick building and platoons of state employees with degrees.
I taught kids that went home to hear their own Mother tell them shit like "I wish I'd aborted your ugly ass!", "I wish you would run away!", "You're too fu*&ing stupid to be MY child!"....
how can a Teacher compete with that?
âOur Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.â
John Adams
I'd add that we don't need to be religious, just respectful of ourselves and others.
""use some small fraction of the money saved to greatly improve public grade schools across the nation by drastically lowering class size in K through the 4th grade, hiring more and better qualified teachers at higher pay, and emphasizing math and language skills, music and art in the early years, and delaying science, civics and history for later on. Better educated citizens will mean more informed voters.""
Education, and respect for learning, (or anything) begins at the family level.
Dismantle the family, or at least the cultures' perception of the NEED for traditional families, and you've dismantled the very foundations of our nation. Doesn't have to be a Mommy and a Daddy that love and respect each other, altho that's ideal. One half decent adult in the home, who tries as hard as they can, every day, will make more difference in the life of a child than any brick building and platoons of state employees with degrees.
I taught kids that went home to hear their own Mother tell them shit like "I wish I'd aborted your ugly ass!", "I wish you would run away!", "You're too fu*&ing stupid to be MY child!"....
how can a Teacher compete with that?
âOur Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.â
John Adams
I'd add that we don't need to be religious, just respectful of ourselves and others.
I agree. It is very difficult for a school to overcome the damage done to children by a negative, unsupportive home environment. That is a different problem, however. And because these unfortunate home environments exist is not a reason for maintaining the status quo in public schools when we have it within our wherewithal to significantly improve them.