SS & savings
 

The only "free money" (hi, Hank!) I found in my five points was in one, and, sure enough, there is no free lunch -- it has an impact on other government expenses and programs because we have to borrow from the market. (1) is a philosophical question: when we measure the extent to which SS is in balance, do we assume that one role of the program that must continue is its subsidy of other government programs. I'm answering no.

Yup, I change the tax burden for social security and fundamentally change the idea that there is a limited pay in, and the argument that you should take the cap off the benefit is legit. Let's tier that, though, so we only do it if we can afford it. Am I overlaying on this a Democratic approach to costs and benefits - yes.

I don't like sales taxes. It is a substitution of one tax that disincentivizes business activity for another tax that disincentives business activity. So that's why I didn't propose it. At the same time, I think I have slightly fewer objections to consumption taxes than wage taxes, so I'd consider it as an element.

And, yes, you are taxing retirement benefits at some point, but the deferral is a huge benefit. What are we doing providing enormous benefits for $2 and $3 million dollar indidivudal retirement pots if we can't afford $12,000 a year for grandma who lives in an old broken down ranch in Missouri after working her whole life? If you remove the wage tax you'll have a more direct incentive for business than by whatever impact lessening deferral has on the savings rate.

SS & savings
 

I think you're conflating two subjects, but maybe I did too. There are two questions: 1 is whether the SS surplus should be "on budget" such that it can be used to make the real deficit appear smaller (this year--2006--the projected surplus is $280B, compared to a nominal defiict of $390B). I believe it should not, but it's semantics. The second question is what should be done with that surplus. I'm comfortable having it in gov't debt, as opposed to corporate debt (bankruptcy), stocks (volatility), or international (oh, great, which countries).

not saying it's not legit, but at that point you've converted SS into just another gov't welfare program that uses, essentially, general revenues for funding and pure benefit formulas for payments. It's AFDC all over again, except for retirees.

all taxes distort economic activity, so your objection proves too much (or something like that). To the contrary, a flat sales tax (or VAT) is less likely to have odd disincentives, because it won't be filled with loopholes, other than perhaps for consumption (you know milk will be exempt). Businesses will pass the tax along to consumers, who will have a disincentive for consumption.

you make it sound like that 2-3M was acquired through some loophole or great luck. It wasn't. You won't have the pot at all if you eliminate tax deferral--it will just be a normal investment account (unless you want to pull the rug out from everyone midstream). It's just moving the wrong direction. Besides, people are constantly cashing in that 2-3M account (which it's pretty hard to get that large without some really savvy investing), and paying taxes on it. Why not just tax capital gains every year? It's the same problem--you can defer the gains until realization? And remind me why Gramma deserves something more than what she (or her hubby) put into SS or her own retirement savings? Does she own a farm, becaause that would be a good reason.

SS & savings
 

Either that, or it's an opposition to the only game in town. Let's not rush to judgment yet. I am sure I'm being naive, but I'd like to think that the next four years is going to be more positive than a Republican steamroller and a Democratic whine-fest.

A Modest Proposal
 

The solution to both SS and Medicare, at least in part, is simple, albeit brutal. Let more people die, and die younger.

Modern medical science has been obssessed for decades with chasing technologies and drugs that prolong life, simply for the sake of prolonging it. Why should a woman in her late 70's, with severely metastisized bone cancer, be given course after course of radiation and chemotherapy? So that she can live another five years in pain and waste away? The focus on such patients should be palliative care. And yet, this scenario is played out in every hospital in the country on a daily basis.

In a nation where we face an extreme shortage of donated organs, Mickey Mantle undergoes a transplant at a cost of over a million dollars to live another two years, while a 34 year-old father of three dies for lack of an organ.

Cardiologists are spending countless dollars on artificial hearts designed to work outside the body, passing along the cost to everyone in the health care system, so that terminal patients can spend months in the hospital while the rest of their organ systems slowly shut down. Why? Because we can.

The biggest problem is that we are aging as a population, medicine allows us to extend that aging period, and we are producing less babies to shunt the bill onto, which is what has kept the system going lo these past three generations. Nobody is setting priorities in health care and as a result the money for grants and research is going towards subsidizing our fear of death, instead of improving the general population's overall health and saving those who still have lives to live.

Iran
 

I hope the administration goes to war against Iran soon. That will be much more fun to argue about than Social Security.

SS & savings
 

Sorry, wrong month. We had the "the blue states subsidize the red states" discussion back in November. That circumstance hasn't changed since the last Civil War. When it does, call us.

Fuck Fuck Fuck
 

Your are missing the boat again.

Clearly, we ought to be producing more babies instead.

SS & savings
 

Not a lot of time at the moment, so a couple quick retorts.

I'm not talking about eliminating deferral, only reducing it. Assume earnings on a 401(k), instead of being tax free, are subject to a 5% tax. Will this discourage anyone's savings? It's a kind of AMT for the 401(k) addicts. And $2-3 million accounts really aren't that rare - I'll bet the majority of BIGLAW law firm partners over 60 have them. Max out for 40 years, that's what you get.

And, on taxes, different taxes have different impacts. Wage taxes discourage employment, consumption taxes discourage consumption. When you look at the international playing field, we tax wages more heavily than others and consumption less heavily, which is why I wasn't getting too upset about replacing wage tax with consumption tax. But I'm really more an income and wealth tax kind of guy.

A Modest Proposal
 

2. Part 2 of my "fuck the oldsters" plan: shift the healthcare subsidy out of late-stage radical intervention for the elderly and into preventative care for citizens with their lives still ahead of them. Repeal Medicare and instead provide G subsidized healthcare for everyone under 18 (or 21 or whatever).

This is, in my view, one of the better arguments for a single G-payor healthcare system: the CBA of healthcare will have to happen over all of society, and, while I'm not fool enough to believe it will result in rational rationing of care, it can't but improve. While I've no problem with rich old farts paying for whatever fool medical treatments they want, the idea that I am paying for it is intolerable. (This and society-wide risk spreading.)

Why the hell are we subsidizing cancer treatments for someone who's 70 but not someone who's 12 (or 45 for that matter, at the height of economic productivity and having others dependent on them)? Why the hell are we subsidizing bank-busting end-of-life support for someone who's 70 but not paying for adequate asthma treatment for 7 year olds so they can prevent long-term damage to their health, attend more school to become more productive members of society for the next 70+ years? Why are we (now - thanks W, you fucker) paying for the arthritis meds of that 70 year old, and his meds to treat the drug-induced diabetes caused by his arthritis meds, but not paying for life-saving drugs for children?

BR(because the system's fucked, duh)C

By the way, Wonk, this post makes you very sexy. Just thought I'd perk up your day! And, fwiw, if I win the lottery, your new ticker is still high on the list of my first purchases.

SS, Medicare & savings
 

Mr. Fox, come now, come now. You don't have to be so glum now.

Clinton did not reform Social Security. That is true. He did, however, put the federal government's finances in order by running surpluses and reducing the deficit dramatically, reducing the debt load that we will be paying in the future. Sadly, Bush has undone all this.

SS & savings
 

I don't like the idea of tiering benefits not because I think that rich people particularly need Social Security, but because ensuring that the middle class gets the same benefits as the poor is a way to make sure that the program retains political support in the future. See, e.g., welfare reform.

A Modest Proposal
 

I'm blushing, and it's not even the FB!!

SS & savings
 

401(k)s barely scratch the surface of tax-free and tax-advantaged savings vehicles, particularly for people who can call themselves "self-employed" (e.g., partners). They can put away amounts approaching six figures a year, tax-free (not just tax-deferred on the returns), plus huge amounts in a variety of plans where the returns are tax-deferred. Some of which have been rendered invulnerable because virtually every Senator or Rep owns one.

So, what you said, but much more so. Put differently, 2+.

But this will never happen under Bush -- anything that looks like a current tax increase is being rejected out-of-hand. Future tax increases (i.e., massive deficits) are okay, and as a near-40-y.o. I must express my appreciation to younger Repubs for footing that bill on my behalf.

A Modest Proposal
 

I have no problem with focusing on prevention, but I suspect that many of the innovations that have cause the average life span to rise from 47 years (at the time of the new deal) to 77 years (today's rate) would not have happpened if health care was directed as you suggest.

SS, Medicare & savings
 

You seem to easily forget that the GOP Congress played a part in this as well.