Brit Hume, deceptive hack
 

In theory that is true but in practice I'm not certain. I believe that a significant number of people do not take full advantage of 401ks even now -- either because they are ignorant, or because they feel they can't afford it.

It is very possible that the most significant effect of expanding 401k options will be that people who already save a lot of money will shift those savings from taxable to tax-advantaged accounts. If someone is not using their 401k now, or not putting away the full amount, how will raising the limit change their behavior?

The net result of savings being shifted would be no increase in the savings rate, but a decrease in tax revenues. The decrease in tax revenues, in turn, results in higher deficits, and that in turn only makes the long-term problems facing SS more serious.

Dean's Comments
 

FWIW, I used to argue on a regular basis with a libertarian that thought that the "race/ethnicity" question on the census was inherently racist.

Club's saner than that guy was.

Dean's Comments
 

I'm not disputing that it's a slam on the GOP. That part is clear. I think what he meant to say is that the only people would attend are those that HAVE to be there for their job, because no minority would attend voluntarily. However, the way in which he conveyed this thought, which is more true than most of us in the GOP would like, was via a stereotype based on race, and I think you people are giving him a pass that you would not give a Republican.

Brit Hume, deceptive hack
 

It increases future tax revenues, however, fortuitously at the time that SS will be in most dire straits.

Dean's Comments
 

I agree with his sentiment, I don't agree with his method of conveyance.

Dean's Comments
 

what if it's on a college application?

Brit Hume, deceptive hack
 

You're simply not reading the original carefully. The "self-supporting annuity plans" referred to there are what we now call Social Security. If you go back FDR's statement, you will see that his (2) and (3) both involve "annuities." On this point, take a look at the SSA's site, cited by Drum:

• When President Roosevelt submitted his legislative package to Congress on January 17, 1935, the Administration's proposals contained three provisions designed to provide retirement security for older Americans:
  
  1. A System of Old Age Pensions- These were state-run welfare programs for the elderly. The Administration's proposal was for block grants to the states to help them fund their existing or any new old-age pension programs. Many states already had such programs in existence and there was considerable interest in securing federal assistance with these programs. In the terminology of the period, old-age "pensions" meant welfare benefits.
  
  2. A System of Mandatory Old Age Annuities- This was the old-age insurance system that we now call Social Security (the term "Social Security" was not applied to the Administration's program until mid-way through the Congressional hearings). In the terminology of the time, this was referred to as "mandatory old-age annuities."
  
  3. A System of Voluntary Old Age Annuities- The Administration also proposed a program of voluntary old-age annuities. These were to be insurance-type annuities, issued by the government, to supplement the benefits contemplated under the mandatory part of the program, or to provide a basic annuity to workers not covered under the mandatory program.

The point FDR was making had to do with an aspect of Social Security that's no longer with us today -- oldsters retiring back then were going to get benefits even though they hadn't paid into the system. This is FDR's (1) -- the pension plan. Over time, as retirees increasingly came from the ranks of the people who got the government-funded benefit, (2) would supplant (1).

In the parlance of the day, both (2) and (3) were "annuities". By inserting the words "government funded," Hume changed the meaning of the original, to imply that (3) was replacing (2) and (1). Those words do not make sense coming from FDR's statement, and the act of inserting them changed the meaning of the original.

Drum said, "#3, which FDR didn't care much about in the first place, never even got enacted in the final bill that created Social Security." Bilmore is incorrect, and you haven't bothered to check Drum's sources. If you go back the SSA site, cited by Drum and linked above, you will see that the last several paragraphs describe how the voluntary annuities were omitted from the legislation. It concludes, "There is little indication that the Administration considered this provision a priority and no record of any extensive efforts on the part of the Administration to save it." Drum's statement is a fair characterization of this.

Who's drinking the Kool-Aid? I actually bothered to read about what FDR said, unlike you and bilmore. What's your excuse?

Dean's Comments
 

Think again. Although not inherently racist, it offends me that it's actually a question that someone thinks has merit. I always check "other," regardless of whether my race is listed.

Dean's Comments
 

Duh. The Democrats have Senators that were in the fucking Klan for goodness sakes. As long as you pretend to support people while taking actions destined to keep them locked to you, you are a good Dem and immune to charges of racism.

Dean's Comments
 

I'm not a conservative, and my race is irrelevant. And I'm not telling anyone they should be offended.

Dean's Comments
 

No, you, being a Republican, immediately read into his remarks what you wanted to. You didn't listen.

He did not say anywhere that a majority of hotel staff were minorities.

If you disagree, go back, look at the comment, and show me how he said that. I suspect you will need somewhere between 50 and 100 words that he did not say to demonstrate the inference, which means it's your reading instead of his speaking.

You have 30 minutes.

Dean's Comments
 

Indeed, club. Indeed.

Brit Hume, deceptive hack
 

How would you make a consumption tax progressive? The tax form would be total income - savings, and you get taxed progressively on the difference?

Dean's Comments
 

In Club's defense, I think he comes from a libertarian sort of point of view under which race is such a live wire that it ought not to be discussed. It's a sort of philisophical commitment to race neutrality through race blindness. I disagree, and I think we can and need to find ways to discuss and address race, buit I can respect where he's coming from, even if I disagree with where he comes out.

Dean's Comments
 

You're not really an engineer from Chicago are you?

Brit Hume, deceptive hack
 

Not if we then switch to a consumption tax and they pass on all that savings to their kids, who continue saving it (or owning capital with it), and passing it on.

But I am mixing two theories. So I will just address the issue w/o using the cheap shot of slapping you with your theories.

Under the current system, money deferred into a 401(k) is subject to SS taxes, but not income taxes, when you put it in, and is subject to income taxes, but not SS taxes, when you take it out. Since SS taxes on that money aren't deferred, the whole projection of SS tax intake vs. benefits paid would be unaffected by increasing 401(k) limits.

The tax revenues that would be increased at the time of withdrawal are the income tax revenues. I think, and you probably agree, that it's all one big pot of money. But people don't see it that way, and the whole "SS deficit" is not couched in those terms. It's seen as a separate deficit from the regular income/spending deficit.

Dean's Comments
 

Close. It's fine to discuss it, but I think race is about as material as hair or eye color. The rest is an accurate statement of my belief.

Dean's Comments
 

I'm anything you want me to be, baby

Dean's Comments
 

Ah, yes, the libertarian club. A very white, male club indeed.

I'd hate to think they extended the logic to gender neutrality. Talking about sex is fun.

(ETA: damn, he got a well-timed prior post in there!)

Brit Hume, deceptive hack
 

Let everyone create "Consumption Savings Accounts" Any contribution is deductible against income--no limits on contribution amounts. Any withdrawal is reported as income in the year it is made. Tax tables like they are now. "Net income" * applicable rate=tax owed.

Dean's Comments
 

If it's totally immaterial, what is there to discuss?

Brit Hume, deceptive hack
 

Dissent. Any form of consumption tax removes from the tax base all accretions to wealth which are saved rather than spent. Tus, by definition, the tax burden falls more heavily on those who can least afford to shoulder it. You can have a threshhold before the tax kicks in, you can exempt essentials like food, rent, etc., but ultimately, the tax burden for the nation will be borne more heavily by those who can least afford it.

One can argue about the income tax being a disincentive to earn more, which is an argument I've never bought, or being too high or too low. What cannot be denied, however, is that an income tax at least place the tax burden on increases in wealth, rather than depletion of wealth.

Dean's Comments
 

That's what the engineer in Chicago said.

The problem is that there are a lot of places where race matters. I know the most about the public health arena, but there are other areas as well. Sickle cell anemia and diabetes are two health problems that tend to be tied to race or ethnicity that I can think of off the top of my head. It's a lot easier for public health authorities to distribute and plan resources if they have good demographic data. I've never seen a public health study where race wasn't a variable, and a lot of times it's a meaningful or significant. The census data, including the racial and ethnic demographic data, is invaluable to public health researchers and the people who are divying up scarce resources.

Brit Hume, deceptive hack
 

Fair points, but I'm not really trying to address the precise question of saving SS through increasing 401ks. That said, the SS deficits will almost certainly have to be funded through ordinary income tax revenues, if for no other reason than to pay the IOUs. Good timing if retirees are wihdrawing from their 401ks

As for passing along--the taxes get paid eventually. First, IRAs have mandatory withdrawals (as do 401ks, no?), so you have to pay the taxes at 70+. If you pass to the kids, they still have to withdraw. And if you convert to a Roth in the meantime, you have to pay taxes then. All they provide for is tax deferral, not tax avoidance.

Brit Hume, deceptive hack
 

But why do you care about wealth unless it's spent? If John D. Rockefeller has gold bars up the wazoo in Switzerland, what does it matter? When he decides to spend them, go ahead and tax them. The fundamental question is why earning income, generally a sign of productivity, is an event we should be taxing, as opposed to consumption, which by definition consumes resources, taking them away from others, is not such an event.

Brit Hume, deceptive hack
 

There is actually a middle path. Make SS a true welfare program, need-tested, and unsupported by a separate tax system. At the same time, engae in a major public relations effort to get people to take the money that used to be withheld for SS and instead put it into a 401(k). If people have the opportunity to put money they are used to not receiving into a retirement account, they may be more likely to save it.

Brit Hume, deceptive hack
 

When do we get to talk about taxing wealth?

Brit Hume, deceptive hack
 

Feel free to start it by stating the case for it.

I'll remind you that the idea wasn't one of George III's best received in the colonies.

Brit Hume, deceptive hack
 

Because the tax system is supposed to pay for support of the system that makes productivity possible. It's part of the grease on the wheels of economic progress. That's reason number 1.

Because a tax dollar is worth more to the G today than it is to them in 20 years. From a tax policy perspective, that's the appropriate view to take. Reason number 2.

Because Mrs. Petroski, a single mother of two in Sandusky, Ohio, who can't afdford to buy a pair of gold-filled earrings, let alone gold bars, shouldn't have to bear a greater portion of the public burden than Mr. Rockefeller. Reason number three.

Because consumption is self-limiting. One can only buy so many gold-plated toilet seats. Therefore, your tax base becomes fixed, absent extraordinary population growth. Consequently, an increase in demand for public services, or in the cost of providing them, forces an increase in the rate at which consumption is taxed. The people whose entire income is of necessity consumed get squeezed while those who have the ability to save more and reduce spending avoid the increase in tax burden. Reason number four.

Brit Hume, deceptive hack
 

Actually, the Revolution was started over consumption taxes. Remember the Boston Tea Party?

Brit Hume, deceptive hack
 

(Pssst. He's not as old as you.)

Brit Hume, deceptive hack
 

so it would be free, like GGG's health plan?

Brit Hume, deceptive hack
 

I was responding to your comment "It increases future tax revenues, however, fortuitously at the time that SS will be in most dire straits" which does seem to be you addressing the question of savings SS through increasing 401ks.

My point about passing down to the kiddies was not in the context of the current system, it was in the context of your idealized consumption tax-based system. If there's only a consumption tax, the withdrawals wouldn't be taxed unless spent. But, in case you were wondering, there are mandatory annual withdrawals for 401(k)s (and other emploeyr plans) at the later of when you terminate or reach age 70.5. And distributions under the current system are taxable if they go to non-spousal beneficiaries.

Brit Hume, deceptive hack
 

So, basically, income minus net amount saved is what you are taxed on, which is essentially what I said. So, your answer really is, yes, fringe, that is how I see it working.

Brit Hume, deceptive hack
 

Well, if we want to be completely accurate, it was the lack of taxes on certain teas. But really, you're kind of ignoring the ". . . without representation part."

on your previous:

1) It also pays for the commercial wealth we have. I don't see a principled difference here.

2) Right, but are two tax dollars in 20 years worth more (or 4). You're forgetting that savings will grow and when used for consumption be taxed on the full amount.

3) I don't see how that's happening. Each is paying in proportion to their consumption, and, if you make it progressive, the rich still get soaked, at least if they want to gold-plate their Hummer toilet seats.

4) Again, you're always going to be able to squeeze more out of the rich. But why the obsession with squeezing out taxes? What happened to the idea of government for the people? You talk like the first priority should be funding government--I think the opposite: how to we reduce government to the minimum necessary. Hiding taxes by hitting up the rich is one of the most disingenuous solutions. The poor, who derive the greatest benefit from the social services offered by gov't should actually see what it means to pay for them.

Brit Hume, deceptive hack
 

Evidently you need to work on your articulation.

Brit Hume, deceptive hack
 

Addendum:

Here's what Hume says in his first paragraph:

"Senate Democrats gathered at the Franklin Roosevelt Memorial (search) today to invoke the image of FDR in calling on President Bush to remove private accounts from his Social Security (search) proposal. But it turns out that FDR himself planned to include private investment accounts in the Social Security program when he proposed it."

"Planned to include . . . " Like, to make them a part of the whole plan. Not to replace the plan. Clearly, Hume was saying what I thought he was saying.

Brit Hume, deceptive hack
 

Post hoc, ergo propter hoc


[confidential to Hank]If you don't post such mickey mouse things so often, I wouldn't have to do this log out/log in thing so much.[/confidential to Hank]

Brit Hume, deceptive hack
 

the sock is of course sad, and I am mostly troubled re. why someone would go to this effort. However, the avater I find offensive- how does that not violate the not copying people rule?

It is clear copyright infringement of my original Hank Washington.

Brit Hume, deceptive hack
 

Do you think Hume read all of that and understood it, before he made his argument? Who knows? Maybe you're right and he's a gawdawful f-ing liar. But who cares?

My excuse would be that I have things to do other than read carefully and/or post pages of blogs on such critical issues as what, precisely, FDR said about SS in the 1930s and how some conservative news anchor engaged in some horrendous misrepresentation thereof for partisan purposes.

I consider those other things to be better uses of my time. However, these priorities mean than I am vulnerable in debates over the details.

Honest to God, though. This strikes me as just about as important and meaningful as Club's assault on Howard Dean. When you go full bore on every little thing you lose some credibility. That's why I think bloggers are generally as bad as talk radio (sports and otherwise). They have so much dead air/space to fill that they must yammer on and on about every little thing and magnify every anthill into Mt. Everest for about three days until it disappears and the next thing comes along.

Hank has probably been so quiet because he's letting us fight amongst ourselves. Let's remember and apply Reagan's 11th Commandment in reverse and let it go. I'll go back to biting my tongue.

S_A_M