Thank you for the comment, Jennifer. We have been drawing attention to this looming problem for years--Vero longer than I have. Vero worries that they'll borrow the funds (triggering inflation), and I think they'll raise taxes (making it even more regressive), but we both agree they won't touch benefits. It's probably the one issue that policymakers are most reluctant to address because it requires decisions that are not politically popular. If they had acted 10-15 years ago, the pain of adjusting wouldn't have been so bad. But the window is now so narrow that they'll have to act sooner or later before markets start pricing in the cost of the looming funding gap.
End all early retirements.. at 62 I am eligible to have a check sent to me( almost 2k). It is reduced and has tax consequences. This has always seemed crazy to me
The issue with cutting benefits is it breaks one of the fundamental benefits of the system -- you can rely on this income being there. People purchased homes with mortgages, moved into retirement communities etc etc based on the assumption that they get this many dollars a month.
And if you say fair enough, we won't cut the benefits of anyone who has already retired it makes the fairness problem you mentioned worse because young people are stil funding that money for the old but not getting it themselves.
And yes, it was a mistake to set it up this way but if I have to think: I always need to keep enough extra in investments to cover the possibility that the government decides to cut benefits again that's a problem.
Ultimately, I think a better move is to accept the tax increase while at the same time taking action to crater home prices. The wealthy old have huge home wealth but losing the value doesn't cost them their house and it gives young people a chance to own a house.
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Well actually the right move is to just let in a bunch more immigrants, maybe even apply a higher tax rate to their income and use that to fix the shortfall but I might as well hope gold bars fall from the sky.
If you want to keep some extremely low floor that few people collect the same OK, but only if the budgetary cost is very low. Only 22,000 people collect the minimum benefit.
Option zero: Just fully fund SS (and Medicare/Medicaid/ACA subsidies) with a VAT, eliminating the wage tax. Tip and Ron just made the mistake of continuing with the wage tax back in 1983, but we can correct it.
Option 0.5 What levels of benefits should be avaialble under SS/Medicare/Medicaid/ACA is a discussion worth having, but not driven by the amouns of revenue currently derived from the wage tax.
Thanks for laying this out so clearly! Are you and Veronique speaking to those in power about this?
Thank you for the comment, Jennifer. We have been drawing attention to this looming problem for years--Vero longer than I have. Vero worries that they'll borrow the funds (triggering inflation), and I think they'll raise taxes (making it even more regressive), but we both agree they won't touch benefits. It's probably the one issue that policymakers are most reluctant to address because it requires decisions that are not politically popular. If they had acted 10-15 years ago, the pain of adjusting wouldn't have been so bad. But the window is now so narrow that they'll have to act sooner or later before markets start pricing in the cost of the looming funding gap.
I hope you are right about taxes, but a VAT.
They’ll get rid of the SS cap, but that will only buy them a little time.
End all early retirements.. at 62 I am eligible to have a check sent to me( almost 2k). It is reduced and has tax consequences. This has always seemed crazy to me
The issue with cutting benefits is it breaks one of the fundamental benefits of the system -- you can rely on this income being there. People purchased homes with mortgages, moved into retirement communities etc etc based on the assumption that they get this many dollars a month.
And if you say fair enough, we won't cut the benefits of anyone who has already retired it makes the fairness problem you mentioned worse because young people are stil funding that money for the old but not getting it themselves.
And yes, it was a mistake to set it up this way but if I have to think: I always need to keep enough extra in investments to cover the possibility that the government decides to cut benefits again that's a problem.
Ultimately, I think a better move is to accept the tax increase while at the same time taking action to crater home prices. The wealthy old have huge home wealth but losing the value doesn't cost them their house and it gives young people a chance to own a house.
---
Well actually the right move is to just let in a bunch more immigrants, maybe even apply a higher tax rate to their income and use that to fix the shortfall but I might as well hope gold bars fall from the sky.
Option 1: Across-the-Board Benefit Cuts
Yes, do this. No more welfare.
If you want to keep some extremely low floor that few people collect the same OK, but only if the budgetary cost is very low. Only 22,000 people collect the minimum benefit.
Option zero: Just fully fund SS (and Medicare/Medicaid/ACA subsidies) with a VAT, eliminating the wage tax. Tip and Ron just made the mistake of continuing with the wage tax back in 1983, but we can correct it.
Option 0.5 What levels of benefits should be avaialble under SS/Medicare/Medicaid/ACA is a discussion worth having, but not driven by the amouns of revenue currently derived from the wage tax.