Americans should not be entitled to Social Security

[Ron Scott]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw.

That “sounds” logical to some extent but when I was working I knew people who lived in Florida, Tennessee, and Texas—none of which have an income tax—and they loved it. All strong economies, good infrastructure, beautiful nature and a reasonable amount of culture.

I on the other hand am more like Fran Lebowitz, who famously said “People tell me ‘Why don’t you leave NY?’ Well sure, I’d love to leave, but where can you go…?”

  Unless it gets cold

I know a couple people you could talk to on (highly taxed) Long Island about the power during and after Sandy. Nature’s a bitch…

[Villanelle]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw.

That “sounds” logical to some extent but when I was working I knew people who lived in Florida, Tennessee, and Texas—none of which have an income tax—and they loved it. All strong economies, good infrastructure, beautiful nature and a reasonable amount of culture.

I on the other hand am more like Fran Lebowitz, who famously said “People tell me ‘Why don’t you leave NY?’ Well sure, I’d love to leave, but where can you go…?”

  Unless it gets cold

I know a couple people you could talk to on (highly taxed) Long Island about the power during and after Sandy. Nature’s a bitch…

You were the one singing the praises of TX's infrastructure. I made no such claim about NY. 

[jrhampt]

I lived in TX for many years, and I have never heard anyone there say it has lots of natural beauty.  Everyone mostly lives indoors in the AC.  Tennessee has much more to offer in that department.  Texas, no.  And the electrical grid is sketchy, as mentioned above.

[PeteD01]

It's always interesting to see that most, if not almost all, discussion of government administered vertical and temporal redistributions, including income taxes, fails to address the, for the middle class, essential function of stabilizing the business cycle, which happens precisely because the programs are not tied to performance of the economy or markets.

This automatic stabilizing effect is also an important reason why SS privatization/stock market investing is such a spectacularly bad idea - funding of payouts would decrease precisely when support of demand is required.

Absence of such stimulatory effects of SS, by sending payments to people who will immediately inject everything back into the economy (especially local), would likely result in the need for economic stimuli going to corporations, which are reluctant to invest in a recessionary/deflationary environment, thus supporting asset prices and not economic activity.

One of the strongest arguments against tying benefits to market performance, by investing SS assets in the markets or similar, is that it seriously undermines the anti-cyclical effectiveness of the programs.
A real world example is the 401k and similar plans that are strongly cyclical thereby deepening recessions and fueling excess consumption during periods of economic overheating.
Of course, these programs largely benefit the middle class, especially the middle and lower middles class, whereas the wealthy lose the ability of looting the economy during crises to some degree - fortunes are made in times of distress.

Taking these macroeconomic effects into account, increasing middle class prosperity requires not decreasing redistribution but increasing it in a countercyclical fashion.

Thus, redistributive government programs benefit the middle class far beyond the actual funds distributed and disadvantage the wealthy disproportionately.
And that is why simply assuming that the reason why the wealthy are against these programs is because they want to get their hands on the funds is somewhat beside the point - redistribution interferes with the ability of the wealthy to take advantage of recessions/depressions.

Any discussion that does not address these macroeconomic effects is necessarily inadequate.


SCHWARTZ CENTER FOR
ECONOMIC POLICY ANALYSIS
THE NEW SCHOOL
WORKING PAPER 2011-2

The Automatic Stabilizing Effects of Social Security and 401(k) Plans
Teresa Ghilarducci, Joelle Saad-Lessler
and Eloy Fisher

The results show that the Social Security program acts as an automatic stabilizer, as do the disability program, the unemployment compensation program, Medicare, and income tax. On the other hand, 401(k) plans are found to be significantly destabilizing. In fact, their impact alone is greater than the impact of unemployment compensation.

...
In other words, 401(k) plans reduce the automatic stabilization impacts of all government programs by 15-20%! This is very significant economically, and must not be ignored.

Our results highlight a significant problem with 401(k) pension plans, and in fact any pension plan that is financial market based. This drawback must be taken into account before any attempts to increase the coverage of 401(k) plans are undertaken.

https://www.economicpolicyresearch.org/images/docs/research/retirement_security/Auto%20Stab%20paper%20FINAL.pdf

[mistymoney]

It's always interesting to see that most, if not almost all, discussion of government administered vertical and temporal redistributions, including income taxes, fail to address the, for the middle class, essential function of stabilizing the business cycle, which happens precisely because the programs are not tied to performance of the economy or markets.

This automatic stabilizing effect is also an important reason why SS privatization/stock market investing is such a spectacularly bad idea - funding of payouts would decrease precisely when support of demand is required.

Absent such stimulatory effects of SS by sending payments to people who will immediately inject everything back into the economy (especially local), would likely result in the need for economic stimuli going to corporations, who are reluctant to invest in a recessionary/deflationary environment, and thus supporting asset prices and not economic activity.

One of the strongest arguments against tying benefits to market performance, by investing SS assets in the markets or similar, is that it seriously undermines the anti-cyclical effectiveness of the programs.
A real world example is the 401k and similar plans that are strongly cyclical, thereby deepening recessions and fueling excess consumption during periods of economic overheating.
Of course, that largely benefits the middle class, especially the middle and lower middles class, whereas the wealthy lose the ability of looting the economy during crises to some degree - fortunes are made in times of distress.

Taking these macroeconomic effects into account, increasing middle class prosperity requires not decreasing redistribution but increasing it in a countercyclical fashion.

Thus, redistributive government programs benefit the middle class far beyond the actual funds distributed and disadvantages the wealthy disproportionately.
And that is why simply assuming that the reason why the wealthy are against these programs is because they want to get their hands on the funds is somewhat beside the point - redistribution interferes with the ability of the wealthy to take advantage of recessions/depressions.

Any discussion that does not address these macroeconomic effects is necessarily inadequate.


SCHWARTZ CENTER FOR
ECONOMIC POLICY ANALYSIS
THE NEW SCHOOL
WORKING PAPER 2011-2

The Automatic Stabilizing Effects of Social Security and 401(k) Plans
Teresa Ghilarducci, Joelle Saad-Lessler
and Eloy Fisher

The results show that the Social Security program acts as an automatic stabilizer, as do the disability program, the unemployment compensation program, Medicare, and income tax. On the other hand, 401(k) plans are found to be significantly destabilizing. In fact, their impact alone is greater than the impact of unemployment compensation.

...
In other words, 401(k) plans reduce the automatic stabilization impacts of all government programs by 15-20%! This is very significant economically, and must not be ignored.

Our results highlight a significant problem with 401(k) pension plans, and in fact any
pension plan that is financial market based. This drawback must be taken into account
before any attempts to increase the coverage of 401(k) plans are undertaken.

https://www.economicpolicyresearch.org/images/docs/research/retirement_security/Auto%20Stab%20paper%20FINAL.pdf

thanks Pete, this is interesting info! The stabilizing effect on the retired householdis obvious, but but had not considered, or heard I don't think, about this larger impact, which makes a lot of sense. And would seem to indicate that enhancing rather than gutting the soc sec program would be the way to go. 

 

[Ron Scott]

Greenspan said it better, back when privatization was in it’s heyday:

https://youtu.be/DNCZHAQnfGU?feature=shared

In any event, when I get SS it’s all going into the stock market LOL.

[nereo]

In any event, when I get SS it’s all going into the stock market LOL.

You may wish to rethink that plan. As a federally back, COLA stream of revenue, SS can serve a similar function to treasury bonds. Using payouts to reduce your total withdrawals greatly reduces the likelihood that you will outlive your portfolio.  If, however, you invest all SS proceeds while simultaneously selling investments to meet your spending needs you will likely increase your taxable burden and potentially sell more shares at the “wrong” time for no personal upside.

[PeteD01]

Greenspan said it better, back when privatization was in it’s heyday:

https://youtu.be/DNCZHAQnfGU?feature=shared

In any event, when I get SS it’s all going into the stock market LOL.

The Greenspan video doesn't do anything but affirm that Greenspan believes in supply side economics (between minute 1.07 and 1.33 in the video or so) - nothing remarkable about that except that Greenspan is a cult follower who was actually close to Ayn Rand for some time.
That association with a cult is problematic as it raises the suspicion that the affected might be susceptible to ideological rationalization strategies in other areas.
So be warned, people like Greenspan who find comfort in closed system foundationalist sophistry, are likely to exhibit rigid thinking patterns that rely on rationalization when confronted with crises that ask for transcendence of pre-existing belief systems.

And as for "In any event, when I get SS it’s all going into the stock market LOL", I don't know what's funny about yet another example of mental accounting.
Obviously, receiving SS payments allows one to decrease fixed income allocation of one's portfolio and most people do just that and keep less treasuries etc. in their self-managed retirement accounts.

In any event, when I get SS it’s all going into the stock market LOL.

You may wish to rethink that plan. As a federally back, COLA stream of revenue, SS can serve a similar function to treasury bonds. Using payouts to reduce your total withdrawals greatly reduces the likelihood that you will outlive your portfolio.  If, however, you invest all SS proceeds while simultaneously selling investments to meet your spending needs you will likely increase your taxable burden and potentially sell more shares at the “wrong” time for no personal upside.

The result is that retirees can keep more money in assets affected by the business cycle, thus countering depressing macroeconomic effects caused by forced sale of depressed assets.

Of course, there is a point where SS payments are simply negligible compared to the wealth earmarked for consumption, but that affects such a tiny part of the population that any effort to means test for that eventuality is way too complicated and expensive to make any sense in a world where taxable income can be manipulated to a large degree.

If one desires to frame this as "investing SS payments in the stock market", that's perfectly fine, but it doesn't change the fact that it is just one of many ways to express what's happening - unless one intentionally attempts to create tax-inefficient churn.

[Telecaster]

The Greenspan video doesn't do anything but affirm that Greenspan believes in supply side economics (between minute 1.07 and 1.33 in the video or so) - nothing remarkable about that except that Greenspan is a cult follower who was actually close to Ayn Rand for some time.

Paul Ryan was a big Ayn Rand acolyte as well.   He made Atlas Shrugged required reading for his staff and gave it away as Christmas presents.  Specifically Ryan mentioned Francisco d'Anconia's speech in that novel as central to his thinking about money.   In it, Rand (though d'Anconia) separated people into two classes.  Those who create money.  And those who don't which don't, who he calls looters (governments who tax) and moochers (those who need welfare).   According to d'Anconia, the looters and moochers literally create evil by taking money away from the money creators. 

In the video Ryan and Greenspan are talking in code, but Ryan (and presumably Greenspan) really believed that Social Security is a manifestation of evil, and he's trying to propose a non-evil way to somehow replace it 

Similarly, recall that Trump ran on replacing the ACA and replacing it with "something great."  But Ryan's bill had no replacement.  It simply eliminated.  In Ryan's mind, it is more righteous to cause millions to lose health care coverage than it is to provide that benefit by taxes.  If that sounds nutty, keep in mind in Ryan's thinking those receiving ACA benefits are moochers and therefore creating evil.    So even if his actions cause his fellow Americans suffer and die needlessly, it is still better than the ACA.   Plus, they are just moochers anyway.   

As an aside, Ryan spent all four years of the Obama administration railing against budget deficits.   Upon becoming Speaker of the House, his signature piece of legislation was the Tax Cuts and Jobs Act (probably the only significant legislation to pass during the Trump admin).   Ryan claimed the TCJA would be revenue neutral.  However, the CBO estimated it would add $2.6 trillion to the deficit.   Ryan rejected that claim, presumably due to his higher level understanding of economic concepts that he learned from science fiction novels instead of learning economics in college, like the normies.   


https://www.cbsnews.com/news/transcript-paul-ryan-on-face-the-nation-october-1-2017/

[Trimatty471]

Personally, the reason I expect the government to pay me SS even though I don't "need" it and even though I retired early is because I believe that people and institutions should live up to their word.  The Government took money from me and my employers for many decades and said that in return I would get it back as Social Security payments in my old age.  I didn't get to decide that I didn't want to pay them, and as far as I'm concerned, they shouldn't get to decide they don't want to pay me. 

The government never told me Social Security was a tax to support other people, they told me it was a savings program from which I would benefit.  The Government's commitment doesn't seem different from selling me a bond.  When the Treasury sells debt, it doesn't get to decide whether the people it promised interest "need" the money. 

I favor helping the poor, particularly children, the elderly, and the infirm.  If the federal government would like to talk openly about raising taxes or moving money around in our budget to do this, I'd be happy to consider it. 

I view the problems facing Social Security (and our budget as a whole) as the result of many decades of willful mismanagement and a refusal to make hard decisions on the part of political leaders (of both major parties).  My belief is that giving up (or allowing government to take away) my SS benefits would effectively be rewarding that mismanagement and enabling future mismanagement.  If government wants to spend more money than it has, it needs to raise taxes or borrow (and borrowing implies raising taxes in the future).  Because politicians generally like to spend money but are loath to raise taxes, they took the easy way out and borrowed.   Now they are facing the consequences of their decisions and are looking for bandaids to put on our gaping fiscal wounds without taking any responsibility for their failures.  At the end of the day, this means increasing taxes, reducing expenditures, or both.  I'm happy to have that discussion and ready to pay my fair share, but I'm not willingly going to enable fiscal stupidity by letting them take away what I was promised without getting real fiscal responsibility in exchange. 

YMMV.

. All of this! They can opt to allow people to donate (if they choose) and provide a tax credit or deduction.

[shelivesthedream]

Increasing the number of years you pay in to collect really disadvantages people (primarily women) who leave the work force for caregiving reasons (and it’s not always kids.) What I’d really like to see is for unpaid work like that to count for ss purposes.

There really are loads of ways to “fix” social security.

The UK does this. Everyone who gets Child Benefit* gets National Insurance** credits for those years.

*Not a "poor person" benefit. Everyone who has a child can get it: https://www.gov.uk/child-benefit/eligibility

**Social security, basically.

The UK does not particularly incentive SAHPs, but it does protect their pension eligibility.

[Ron Scott]

In any event, when I get SS it’s all going into the stock market LOL.

You may wish to rethink that plan. As a federally back, COLA stream of revenue, SS can serve a similar function to treasury bonds. Using payouts to reduce your total withdrawals greatly reduces the likelihood that you will outlive your portfolio.  If, however, you invest all SS proceeds while simultaneously selling investments to meet your spending needs you will likely increase your taxable burden and potentially sell more shares at the “wrong” time for no personal upside.

Of course, but living on interest and dividends so.

[PeteD01]

In any event, when I get SS it’s all going into the stock market LOL.

You may wish to rethink that plan. As a federally back, COLA stream of revenue, SS can serve a similar function to treasury bonds. Using payouts to reduce your total withdrawals greatly reduces the likelihood that you will outlive your portfolio.  If, however, you invest all SS proceeds while simultaneously selling investments to meet your spending needs you will likely increase your taxable burden and potentially sell more shares at the “wrong” time for no personal upside.

Of course, but living on interest and dividends so.

Again, this is just mental accounting.

Not reinvesting dividends or interest received is no different from selling shares/bonds from a total return perspective (- unless the investment is after tax, then selling shares is better from a tax liability perspective).

[ROF Expat]

In any event, when I get SS it’s all going into the stock market LOL.

Did something change here? 

I thought the whole basis of this discussion was your assertion that people who don't "need" SS or who retired early shouldn't be given it or shouldn't take it.  Now it seems you just want "other people" not to take or get SS. 

[Telecaster]

Did something change here? 

I thought the whole basis of this discussion was your assertion that people who don't "need" SS or who retired early shouldn't be given it or shouldn't take it.  Now it seems you just want "other people" not to take or get SS.

To be fair, he was talking about public policy.  For example, I follow the tax code even though I don't agree with all of it.   

[ROF Expat]

[quote author=Telecaster link=topic=135007.msg3296498#msg329649
To be fair, he was talking about public policy.  For example, I follow the tax code even though I don't agree with all of it.
[/quote]

Maybe.  And I'm not one to get worked up over an anonymous discussion on the internet. 

But OP started the conversation with statements about people as much as public policy: 

"Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it." 

and

"I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to"


and

"We gotta start somewhere."

OP is 100% entitled to an opinion.  I just wanted to point out that I sense a bit of hypocrisy in that opinion.  Following the tax code to be in compliance with the law (even if you don't like all of it) doesn't seem hypocritical to me because not doing so is breaking the law.  Railing about the evils of something but then actively choosing to benefit from it yourself does. 

If the first post had contained this later quote:

"when I get SS it’s all going into the stock market LOL"
it would have changed the tone substantially. 

[wenchsenior]

I lived in TX for many years, and I have never heard anyone there say it has lots of natural beauty.  Everyone mostly lives indoors in the AC.  Tennessee has much more to offer in that department.  Texas, no.  And the electrical grid is sketchy, as mentioned above.

There are definitely some pockets of great natural beauty, but they are very few and far between/regional as compared with the size of the state overall. The worse issue is that there is so little publicly accessible land as a portion of the state's overall land area. I've lived or spent extensive time in states in the Midwest, Pacific NW, SW, and Atlantic Gulf Coast. All were notably more attractive and abundant in terms of accessible outdoor natural beauty than Texas.

[Fomerly known as something]

@Ron Scott on your point about FIRE and SS, how many “years or work” do you see as the cut off?  I’m a later more traditional early retiree so will have 29 of 35 years counter toward social security.  Should one have to do all 35 years?  If so does part time work for 6 of the next 20 years count?  As it is, I get penalized for those missing 6 years as they will be 0 earning years.  What is the cut off for you? 

[mistymoney]

[quote author=Telecaster link=topic=135007.msg3296498#msg329649
To be fair, he was talking about public policy.  For example, I follow the tax code even though I don't agree with all of it.

Maybe.  And I'm not one to get worked up over an anonymous discussion on the internet. 

But OP started the conversation with statements about people as much as public policy: 

"Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it." 

and

"I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to"


and

"We gotta start somewhere."

OP is 100% entitled to an opinion.  I just wanted to point out that I sense a bit of hypocrisy in that opinion.  Following the tax code to be in compliance with the law (even if you don't like all of it) doesn't seem hypocritical to me because not doing so is breaking the law.  Railing about the evils of something but then actively choosing to benefit from it yourself does. 

If the first post had contained this later quote:

"when I get SS it’s all going into the stock market LOL"
it would have changed the tone substantially.
[/quote]

Yeah - I think this is fair a point to make.

While on one hand, I don't think there was anything that was actually persuasive about disentitling soc sec (although I did learn alot from the rebuttals) on the other it is unclear to me if that was the main point of the thread? Especially as Ron doesn't seem to know a whole lot about the ins and outs of social security - or maye doesn't want to know/acknowledge them here.

10 years of working, even a high paying job, combined with 25 years of zeros just isn't a huge amount of money fr the PIA. The really important piece of social security for those types of folks is going to be access to medicare in later life and to talk about taking that away is just a non-starter I think. He also seems (maybe I missed it?) to have completely ignored the posts about the effect on minor children and the disability component. I know of disabled adult children who are beneficiaries of social security on their parents work records, and this is a vital source of support for them (medicare, as well as income) after their parents are deceased.

I'm not sure why the 10 year requirement going to 20 is such a big piece of the argument in this thread. If we are talking about disentitling beneficiaries for a lack of "contribution", let's start with non-working spouses collecting off someone else's record. If someone doesn't have 10 years of service on their own record, why aren't they the freeloaders to be jettisoned?

And I'm not sure if this is still allowed or not, but I know there are people who collected their 50% of spouses record (or 100% if widow/er) then switched to their own, greatly upgraded benefit at 70. That is certainly too much double dipping! But again - could be eliminated by removing the spousal benefit. Everyone need to "contribute", right?

[iris lily]

[quote author=Telecaster link=topic=135007.msg3296498#msg329649
To be fair, he was talking about public policy.  For example, I follow the tax code even though I don't agree with all of it.

Maybe.  And I'm not one to get worked up over an anonymous discussion on the internet. 

But OP started the conversation with statements about people as much as public policy: 

"Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it." 

and

"I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to"


and

"We gotta start somewhere."

OP is 100% entitled to an opinion.  I just wanted to point out that I sense a bit of hypocrisy in that opinion.  Following the tax code to be in compliance with the law (even if you don't like all of it) doesn't seem hypocritical to me because not doing so is breaking the law.  Railing about the evils of something but then actively choosing to benefit from it yourself does. 

If the first post had contained this later quote:

"when I get SS it’s all going into the stock market LOL"
it would have changed the tone substantially.

Yeah - I think this is fair a point to make.

While on one hand, I don't think there was anything that was actually persuasive about disentitling soc sec (although I did learn alot from the rebuttals) on the other it is unclear to me if that was the main point of the thread? Especially as Ron doesn't seem to know a whole lot about the ins and outs of social security - or maye doesn't want to know/acknowledge them here.

10 years of working, even a high paying job, combined with 25 years of zeros just isn't a huge amount of money fr the PIA. The really important piece of social security for those types of folks is going to be access to medicare in later life and to talk about taking that away is just a non-starter I think. He also seems (maybe I missed it?) to have completely ignored the posts about the effect on minor children and the disability component. I know of disabled adult children who are beneficiaries of social security on their parents work records, and this is a vital source of support for them (medicare, as well as income) after their parents are deceased.

I'm not sure why the 10 year requirement going to 20 is such a big piece of the argument in this thread. If we are talking about disentitling beneficiaries for a lack of "contribution", let's start with non-working spouses collecting off someone else's record. If someone doesn't have 10 years of service on their own record, why aren't they the freeloaders to be jettisoned?

And I'm not sure if this is still allowed or not, but I know there are people who collected their 50% of spouses record (or 100% if widow/er) then switched to their own, greatly upgraded benefit at 70. That is certainly too much double dipping! But again - could be eliminated by removing the spousal benefit. Everyone need to "contribute", right?

This bolded sounds like the “file and suspend” program that was cut 9 years ago. We missed that deadline by birthdays being two months away. Pissed me off tremendously. The officials reason for cutting it was “not many people took advantage of it” which is the usual government bullshit.

[Ron Scott]

[quote author=Telecaster link=topic=135007.msg3296498#msg329649
To be fair, he was talking about public policy.  For example, I follow the tax code even though I don't agree with all of it.

Maybe.  And I'm not one to get worked up over an anonymous discussion on the internet. 

But OP started the conversation with statements about people as much as public policy: 

"Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it." 

and

"I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to"


and

"We gotta start somewhere."

OP is 100% entitled to an opinion.  I just wanted to point out that I sense a bit of hypocrisy in that opinion.  Following the tax code to be in compliance with the law (even if you don't like all of it) doesn't seem hypocritical to me because not doing so is breaking the law.  Railing about the evils of something but then actively choosing to benefit from it yourself does. 

If the first post had contained this later quote:

"when I get SS it’s all going into the stock market LOL"
it would have changed the tone substantially.

Yeah - I think this is fair a point to make.

While on one hand, I don't think there was anything that was actually persuasive about disentitling soc sec (although I did learn alot from the rebuttals) on the other it is unclear to me if that was the main point of the thread? Especially as Ron doesn't seem to know a whole lot about the ins and outs of social security - or maye doesn't want to know/acknowledge them here.

Please treat us to your take on “ins and outs” LOL. We could use a laugh in this thread.

The position of mine you so heavily criticize seems on point in light of the problem and the direction the program has been taking over time.

We are paying out too much money in SS and it appears unsustainable UNLESS changes to the system are made. Taxing SS is a step in the direction of at least reducing it for people who don’t need it. All I’m say is why pussyfoot with taxes? People who don’t need it should just not get it. Then there would be more money for those who do.

As I write this I’m laughing that some people feel the need to argue that I MUST TAKE SS or there’s something wrong about me—or the program will somehow implode! Guys, take a drink or a hit or something. It’s really pretty simple.

[PeteD01]

[quote author=Telecaster link=topic=135007.msg3296498#msg329649
To be fair, he was talking about public policy.  For example, I follow the tax code even though I don't agree with all of it.

Maybe.  And I'm not one to get worked up over an anonymous discussion on the internet. 

But OP started the conversation with statements about people as much as public policy: 

"Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it." 

and

"I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to"


and

"We gotta start somewhere."

OP is 100% entitled to an opinion.  I just wanted to point out that I sense a bit of hypocrisy in that opinion.  Following the tax code to be in compliance with the law (even if you don't like all of it) doesn't seem hypocritical to me because not doing so is breaking the law.  Railing about the evils of something but then actively choosing to benefit from it yourself does. 

If the first post had contained this later quote:

"when I get SS it’s all going into the stock market LOL"
it would have changed the tone substantially.

Yeah - I think this is fair a point to make.

While on one hand, I don't think there was anything that was actually persuasive about disentitling soc sec (although I did learn alot from the rebuttals) on the other it is unclear to me if that was the main point of the thread? Especially as Ron doesn't seem to know a whole lot about the ins and outs of social security - or maye doesn't want to know/acknowledge them here.

Please treat us to your take on “ins and outs” LOL. We could use a laugh in this thread.

The position of mine you so heavily criticize seems on point in light of the problem and the direction the program has been taking over time.

We are paying out too much money in SS and it appears unsustainable UNLESS changes to the system are made. Taxing SS is a step in the direction of at least reducing it for people who don’t need it. All I’m say is why pussyfoot with taxes? People who don’t need it should just not get it. Then there would be more money for those who do.

As I write this I’m laughing that some people feel the need to argue that I MUST TAKE SS or there’s something wrong about me—or the program will somehow implode! Guys, take a drink or a hit or something. It’s really pretty simple.

Don't take it if you don't want to - it's not compulsory.

[joshrosenthal5000]

Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it. Draw a reasonable cutoff someplace and declare ineligibility.

Today’s article in the Times is sobering on a number of fronts, but one piece brought all this home. Paraphrasing:  A 65-year-old couple with average life expectancy and average household income (about $90,000 in 2023) who retires in 2025 would receive $1.34 million in benefits, even though they had paid only $720,000.  Younger generations are making up that difference.

That sucks.

I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to. Of course, these people should be given the option of contributing to SS on their own—maybe at an inflated rate based on their last years working income—to maintain eligibility. Increase eligibility from 10 years’ contributions to 20 years. (I’m aware this position will not be as popular as my introductory one but whatever.)

Eliminating payments to those who clearly don’t need it in retirement and to those who contribute too little, by choice, will help.

The system is broken. This idea won’t fix it all but it’s a start. We gotta start somewhere.

We can start by sending your SS checks to me as I am paying into SS and the fund may not be available when I retire.

[Ron Scott]

Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it. Draw a reasonable cutoff someplace and declare ineligibility.

Today’s article in the Times is sobering on a number of fronts, but one piece brought all this home. Paraphrasing:  A 65-year-old couple with average life expectancy and average household income (about $90,000 in 2023) who retires in 2025 would receive $1.34 million in benefits, even though they had paid only $720,000.  Younger generations are making up that difference.

That sucks.

I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to. Of course, these people should be given the option of contributing to SS on their own—maybe at an inflated rate based on their last years working income—to maintain eligibility. Increase eligibility from 10 years’ contributions to 20 years. (I’m aware this position will not be as popular as my introductory one but whatever.)

Eliminating payments to those who clearly don’t need it in retirement and to those who contribute too little, by choice, will help.

The system is broken. This idea won’t fix it all but it’s a start. We gotta start somewhere.

We can start by sending your SS checks to me as I am paying into SS and the fund may not be available when I retire.

The chances of that happening are not greater than 0 LOL! Which is why I offered a suggestion that would free up some money from the demands of the program.

With regard to your fears that the money will be gone by the time you retire, I will guarantee that will not happen or pay you the difference…for a small, one-time, $10,000 fee today. Offer is good through 9-30-24.

[nereo]

Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it. Draw a reasonable cutoff someplace and declare ineligibility.

Today’s article in the Times is sobering on a number of fronts, but one piece brought all this home. Paraphrasing:  A 65-year-old couple with average life expectancy and average household income (about $90,000 in 2023) who retires in 2025 would receive $1.34 million in benefits, even though they had paid only $720,000.  Younger generations are making up that difference.

That sucks.

I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to. Of course, these people should be given the option of contributing to SS on their own—maybe at an inflated rate based on their last years working income—to maintain eligibility. Increase eligibility from 10 years’ contributions to 20 years. (I’m aware this position will not be as popular as my introductory one but whatever.)

Eliminating payments to those who clearly don’t need it in retirement and to those who contribute too little, by choice, will help.

The system is broken. This idea won’t fix it all but it’s a start. We gotta start somewhere.

We can start by sending your SS checks to me as I am paying into SS and the fund may not be available when I retire.

The chances of that happening are not greater than 0 LOL! Which is why I offered a suggestion that would free up some money from the demands of the program.

Again, there seems to be an issue of not understanding how SS benefits actually work.
SS payments already are subject to taxation, and as earned income (not as LTCG which has much lower rates). It’s a relatively progressive taxation which includes the wages, dividends  and interest declared on your taxes. So the people who pay are those like you, ie the people who “don’t need it”. Basically, the more declared income one has, the greater their tax burden on SS distribution. There’s more information here:

https://www-origin.ssa.gov/benefits/retirement/planner/taxes.html

As discussed upthread, in the US there is no wealth reporting, so means-testing SS (or other things) is logistically challenging. It also opens up a big area of uncertainty of how you measure different asset classes and across all people and regions. For example, is a persons primary residence and number of dependents factored in, and if so how to standardize across different cost of living regions and levels of care. For this reason (and others) few economists see means testing benefits as a plausible path

[mistymoney]

[quote author=Telecaster link=topic=135007.msg3296498#msg329649
To be fair, he was talking about public policy.  For example, I follow the tax code even though I don't agree with all of it.

Maybe.  And I'm not one to get worked up over an anonymous discussion on the internet. 

But OP started the conversation with statements about people as much as public policy: 

"Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it." 

and

"I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to"


and

"We gotta start somewhere."

OP is 100% entitled to an opinion.  I just wanted to point out that I sense a bit of hypocrisy in that opinion.  Following the tax code to be in compliance with the law (even if you don't like all of it) doesn't seem hypocritical to me because not doing so is breaking the law.  Railing about the evils of something but then actively choosing to benefit from it yourself does. 

If the first post had contained this later quote:

"when I get SS it’s all going into the stock market LOL"
it would have changed the tone substantially.

Yeah - I think this is fair a point to make.

While on one hand, I don't think there was anything that was actually persuasive about disentitling soc sec (although I did learn alot from the rebuttals) on the other it is unclear to me if that was the main point of the thread? Especially as Ron doesn't seem to know a whole lot about the ins and outs of social security - or maye doesn't want to know/acknowledge them here.

Please treat us to your take on “ins and outs” LOL. We could use a laugh in this thread.

The position of mine you so heavily criticize seems on point in light of the problem and the direction the program has been taking over time.

We are paying out too much money in SS and it appears unsustainable UNLESS changes to the system are made. Taxing SS is a step in the direction of at least reducing it for people who don’t need it. All I’m say is why pussyfoot with taxes? People who don’t need it should just not get it. Then there would be more money for those who do.

As I write this I’m laughing that some people feel the need to argue that I MUST TAKE SS or there’s something wrong about me—or the program will somehow implode! Guys, take a drink or a hit or something. It’s really pretty simple.

Don't take it if you don't want to - it's not compulsory.

What happens if you don't sign up for benefits? Do they just never start your payments?

I know with meicare their is a lifetime penalty for not signing up at 65. What happens if you never sign up for medicare at all?

If you sign up for medicare at 65 but never for the pia payments, would they ignore you or start sending at 70?

[nereo]

For SS you don’t sign up. Each year when you report your taxes there is an amount you contribute to SS boxes  3 & 4 on a standard W2 for wage earners). That is your annual contribution from which your benefits are calculated. The SSA will periodically mail you your anticipated benefits based both on your current and projected future contributions. For more specific data you can log in to see your actual contributions and fill in anticipated future years. SS calculated benefits from your 35 highest contribution years, so years with $0 can really impact the total (see earlier discussion). For the majority of people it’s all automatic. If you have non-payroll income you will declare that on your taxes and pay accordingly.

You can choose when to start receiving benefits, with the default now at 67 for anyone born after 1960. If you delay or choose to take reduced payments before 67 you must notify SSA. The easiest way to do this is online, though you can do it via pen and paper as well.

More info here:
https://www.ssa.gov/benefits/retirement/planner/delayret.html#:~:text=Choosing%20when%20to%20begin%20your,decide%20what's%20right%20for%20you:

[Ron Scott]

Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it. Draw a reasonable cutoff someplace and declare ineligibility.

Today’s article in the Times is sobering on a number of fronts, but one piece brought all this home. Paraphrasing:  A 65-year-old couple with average life expectancy and average household income (about $90,000 in 2023) who retires in 2025 would receive $1.34 million in benefits, even though they had paid only $720,000.  Younger generations are making up that difference.

That sucks.

I also believe those who FIRE at a fairly early age should not get Social Security if they are able to continue contributing to the good of all but simply choose not to. Of course, these people should be given the option of contributing to SS on their own—maybe at an inflated rate based on their last years working income—to maintain eligibility. Increase eligibility from 10 years’ contributions to 20 years. (I’m aware this position will not be as popular as my introductory one but whatever.)

Eliminating payments to those who clearly don’t need it in retirement and to those who contribute too little, by choice, will help.

The system is broken. This idea won’t fix it all but it’s a start. We gotta start somewhere.

We can start by sending your SS checks to me as I am paying into SS and the fund may not be available when I retire.

The chances of that happening are not greater than 0 LOL! Which is why I offered a suggestion that would free up some money from the demands of the program.

Again, there seems to be an issue of not understanding how SS benefits actually work.
SS payments already are subject to taxation…

Maybe that’s why I stated above, in a post you ignored, “Taxing SS is a step in the direction of at least reducing it for people who don’t need it.” So maybe the issue is with you, instead of me not understanding.

Don't take it if you don't want to - it's not compulsory.

Let me explain: My idea is to free up a significant amount of money—that SS sends to those who don’t need it—thus making that money available to those who do. If I personally simply decide not to “take it” there wouldn’t be much money available to others. It’s a matter of scale. Capeesh?

[Telecaster]

Let me explain: My idea is to free up a significant amount of money—that SS sends to those who don’t need it—thus making that money available to those who do. If I personally simply decide not to “take it” there wouldn’t be much money available to others. It’s a matter of scale. Capeesh?

Agreed, I don't see any ethical dilemma between arguing for a change in public policy while observing current policy.   

However, the amount of money your idea would free up isn't all that significant.  I don't recall an analysis that studied your idea specifically, but lots studies have looked the effect of reducing benefits in some form for higher income individuals.   The uniform result is it isn't nearly enough money, partially because there aren't very many people with high incomes in retirement.  There has to be a tax increase component. 

[PeteD01]

Don't take it if you don't want to - it's not compulsory.

Let me explain: My idea is to free up a significant amount of money—that SS sends to those who don’t need it—thus making that money available to those who do. If I personally simply decide not to “take it” there wouldn’t be much money available to others. It’s a matter of scale. Capeesh?

I haven't counted the number of times it has been mentioned in this thread that means testing is not practical at all - but means testing would be the only way to administratively address the problem of people saving SS payments instead of spending them.

However, the overwhelming majority of Americans is not wealthy enough to be able to retire without SS, so the problem is not at all quantitatively significant.

Basically, your argument rests on moral reasoning, i.e. people who do not need SS should not get it because they do not have a need for them.

That is exactly the old, and many times debunked, idea of people mooching off of welfare, a trope exploited since the times of Reagan (welfare queens and all) designed to create resentment in people who have bought into the zero-sum idea of the economy.

SS is another animal though, it is actually a government sponsored insurance scheme in which participants acquire entitlements by virtue of buying into the scheme over time with payouts related to contributions to a large degree.
Introducing means testing of some sort, beyond bend points and progressive taxation (redistributive features that are not unusual at all), is inappropriate and excessively expensive.

Even in the case of actual welfare, which SS is not, policing welfare fraud is not cost effective because the level is rather low and welfare fraud does not impact wealth redistribution effects as the funds illegally obtained are most likely spent, that is re-injected into the economy.

And no, people should not forego SS payments they do not "need" but rather donate them to a charity that disburses funds on an as-we-go basis in order to maximize redistributive effects on the business cycle.
But if you do not want to take SS benefits - no problem, but don't try to sell it as a solution to some problem you are imagining and that others should do the same 

Now corporate welfare is an entirely different subject because any payments or tax credits extended to corporations not in distress are locked into the business cycle, thus exacerbating length and depth of economic downturns.

In a nutshell, it all harks back to an ideology that divides people into those who deserve wealth and others who do not and that makes political use of vilification of those who are deemed undeserving.

You got that, right?

[ROF Expat]

I have an uncle named Samuel.  He was born to wealth.  He inherited a lot of money and is CEO and Chairman of the Board of our large family-owned Company, which gives him a very generous income every year.  He also runs the family office.  You would think it would be hard to mess this up. 

He has long been the family’s embarrassing “drunk uncle” but we knew he was rich and assumed everything would work out.  He threw a lot of great parties and was very generous with gifts, and the family office paid tuition for our kids.  Over the years, he started spending a lot of money on booze, cocaine, and hookers and very large gun, art, and car collections.  He increased his CEO salary to grotesque levels and started adding incredibly expensive benefits, like having the company buy a private jet and a yacht for his use.  The company is still solid, but not as lean, profitable, or creditworthy as it used to be, which is affecting all of us as owners.  At some point, he started putting a lot of his personal expenses on his credit cards and asking members of the family for personal loans for what he described as “temporary cashflow issues.”  We ignored the growing debt and some of us loaned him money because he was still throwing parties and giving gifts, and the family office was paying tuition for our kids. 

Now that interest rates have gone up considerably, it is getting harder to ignore the problem.  Uncle Sam is still throwing big parties and spending huge amounts on booze, cocaine, hookers, cars, and guns.  His credit card debts are growing and he continues to ask us for loans.  He’s meeting all his debt payments, but many of us are wondering how he’ll ever pay back the principal. 

Now, my Uncle Sam is suggesting that the Family Corporation can’t afford to subsidize the Family Office, so the Family Office can’t afford to pay tuition for so many kids.  He’s suggesting that those of us who “don’t need it” should forego the assistance.  Some members of the family agree with him.  Others feel that the Family Corporation would have more money to support the Family Office if it sold the corporate jet and the corporate yacht, and that Uncle Sam needs to go into rehab to stop spending money on booze, coke, and hookers.  They suggest that he might even be a little more judicious about adding to his gun, art, and car collections. 

I’ve tried to stay out of this, but now that my kid is due to go to University, Uncle Sam has suggested that my kid “doesn’t need the money.”  He has asked (with whiskey on his breath and white powder on his shirt) that I give him another loan “to help the poorer kids in the family go to college.”  He said that he’s never missed an interest payment, so he’s a good risk.  He also pointed out that I don’t have to give him the loan because he can still borrow money from foreign friends. 
I want to help out the kids in the family who really need it, but I’m not sure that foregoing my own assistance or giving another loan to Uncle Sam are the best way forward.  Any thoughts on this?

[PeteD01]

...
I want to help out the kids in the family who really need it, but I’m not sure that foregoing my own assistance or giving another loan to Uncle Sam are the best way forward.  Any thoughts on this?

Well, I would first consider that government activity is not remotely comparable to corporate activity, so using a family business that is being dramatically looted by irresponsible cocaine fueled company officers as an example is not going to explain much.

Here is a JP Morgan opinion that is just as good as anyone else’s (just ignore the investment advice):

How worried should you be about the U.S. debt and deficit?
June 28, 2024

Conclusion: Endgames for policymakers and investors
The most likely scenario for the next few years is the status quo: Deficits remain wide and debt levels continue to rise. Despite the associated risks, we believe these won't destabilize multi-asset portfolios due to the credibility of policymakers, ongoing investor demand for U.S. Treasury assets and a robust tax base.

There are methods to address the debt problem. One option is preemptive fiscal reform, which could involve altering entitlement or discretionary spending, and/or raising taxes on high-net-worth individuals or corporations. Another is higher economic growth through productivity gains. Specifically, advancements in artificial intelligence could enhance fiscal sustainability by boosting economic output without causing inflation. The CBO (Congressional Budget Office) does not, and has not historically, forecasted these types of productivity booms.

Finally, we should note that the CBO has shown a tendency to develop overly pessimistic projections for the U.S. debt and deficits. For instance, in 2009 the CBO projected that mandatory government spending would outstrip total U.S. revenues by 2024. That intersection has been revised further into the future to 2034.

https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-how-worried-should-you-be-about-the-us-debt-and-deficit

[wageslave23]

...
I want to help out the kids in the family who really need it, but I’m not sure that foregoing my own assistance or giving another loan to Uncle Sam are the best way forward.  Any thoughts on this?

Well, I would first consider that government activity is not remotely comparable to corporate activity, so using a family business that is being dramatically looted by irresponsible cocaine fueled company officers as an example is not going to explain much.

Here is a JP Morgan opinion that is just as good as anyone else’s (just ignore the investment advice):

How worried should you be about the U.S. debt and deficit?
June 28, 2024

Conclusion: Endgames for policymakers and investors
The most likely scenario for the next few years is the status quo: Deficits remain wide and debt levels continue to rise. Despite the associated risks, we believe these won't destabilize multi-asset portfolios due to the credibility of policymakers, ongoing investor demand for U.S. Treasury assets and a robust tax base.

There are methods to address the debt problem. One option is preemptive fiscal reform, which could involve altering entitlement or discretionary spending, and/or raising taxes on high-net-worth individuals or corporations. Another is higher economic growth through productivity gains. Specifically, advancements in artificial intelligence could enhance fiscal sustainability by boosting economic output without causing inflation. The CBO (Congressional Budget Office) does not, and has not historically, forecasted these types of productivity booms.

Finally, we should note that the CBO has shown a tendency to develop overly pessimistic projections for the U.S. debt and deficits. For instance, in 2009 the CBO projected that mandatory government spending would outstrip total U.S. revenues by 2024. That intersection has been revised further into the future to 2034.

https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-how-worried-should-you-be-about-the-us-debt-and-deficit

5 years ago the "experts" also said we didn't have to worry about inflation. 

[PeteD01]

...
I want to help out the kids in the family who really need it, but I’m not sure that foregoing my own assistance or giving another loan to Uncle Sam are the best way forward.  Any thoughts on this?

Well, I would first consider that government activity is not remotely comparable to corporate activity, so using a family business that is being dramatically looted by irresponsible cocaine fueled company officers as an example is not going to explain much.

Here is a JP Morgan opinion that is just as good as anyone else’s (just ignore the investment advice):

How worried should you be about the U.S. debt and deficit?
June 28, 2024

Conclusion: Endgames for policymakers and investors
The most likely scenario for the next few years is the status quo: Deficits remain wide and debt levels continue to rise. Despite the associated risks, we believe these won't destabilize multi-asset portfolios due to the credibility of policymakers, ongoing investor demand for U.S. Treasury assets and a robust tax base.

There are methods to address the debt problem. One option is preemptive fiscal reform, which could involve altering entitlement or discretionary spending, and/or raising taxes on high-net-worth individuals or corporations. Another is higher economic growth through productivity gains. Specifically, advancements in artificial intelligence could enhance fiscal sustainability by boosting economic output without causing inflation. The CBO (Congressional Budget Office) does not, and has not historically, forecasted these types of productivity booms.

Finally, we should note that the CBO has shown a tendency to develop overly pessimistic projections for the U.S. debt and deficits. For instance, in 2009 the CBO projected that mandatory government spending would outstrip total U.S. revenues by 2024. That intersection has been revised further into the future to 2034.

https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-how-worried-should-you-be-about-the-us-debt-and-deficit

5 years ago the "experts" also said we didn't have to worry about inflation.

It´s one thing to "worry" about inflation and another to accept inflation as an inevitable consequence of fiscal stimuli sufficient to avoid a recession or speed up recovery from a recession.

The consequences of insufficient economic stimulus, in form of a protracted and therefore painful recovery from the financial crisis of 2008 because of all the bad things that are supposedly going to happen when the purse strings are loosened too much, led to a much more vigorous stimulus post-Covid.

But the Fed put on the brakes and got inflation under control (2.5% currently) and is now deftly reducing interest rates again and might just engineer that elusive soft landing.

This is not to say that inflation is not hurting people but the consequences of attempting to avoid a spike in inflation at all cost indeed comes with a likely much higher cost.

[Ron Scott]

...
I want to help out the kids in the family who really need it, but I’m not sure that foregoing my own assistance or giving another loan to Uncle Sam are the best way forward.  Any thoughts on this?

Well, I would first consider that government activity is not remotely comparable to corporate activity, so using a family business that is being dramatically looted by irresponsible cocaine fueled company officers as an example is not going to explain much.

Here is a JP Morgan opinion that is just as good as anyone else’s (just ignore the investment advice):

How worried should you be about the U.S. debt and deficit?
June 28, 2024

Conclusion: Endgames for policymakers and investors
The most likely scenario for the next few years is the status quo: Deficits remain wide and debt levels continue to rise. Despite the associated risks, we believe these won't destabilize multi-asset portfolios due to the credibility of policymakers, ongoing investor demand for U.S. Treasury assets and a robust tax base.

There are methods to address the debt problem. One option is preemptive fiscal reform, which could involve altering entitlement or discretionary spending, and/or raising taxes on high-net-worth individuals or corporations. Another is higher economic growth through productivity gains. Specifically, advancements in artificial intelligence could enhance fiscal sustainability by boosting economic output without causing inflation. The CBO (Congressional Budget Office) does not, and has not historically, forecasted these types of productivity booms.

Finally, we should note that the CBO has shown a tendency to develop overly pessimistic projections for the U.S. debt and deficits. For instance, in 2009 the CBO projected that mandatory government spending would outstrip total U.S. revenues by 2024. That intersection has been revised further into the future to 2034.

https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-how-worried-should-you-be-about-the-us-debt-and-deficit

5 years ago the "experts" also said we didn't have to worry about inflation.

It´s one thing to "worry" about inflation and another to accept inflation as an inevitable consequence of fiscal stimuli sufficient to avoid a recession or speed up recovery from a recession.

The consequences of insufficient economic stimulus, in form of a protracted and therefore painful recovery from the financial crisis of 2008 because of all the bad things that are supposedly going to happen when the purse strings are loosened too much, led to a much more vigorous stimulus post-Covid.

But the Fed put on the brakes and got inflation under control (2.5% currently) and is now deftly reducing interest rates again and might just engineer that elusive soft landing.

This is not to say that inflation is not hurting people but the consequences of attempting to avoid a spike in inflation at all cost indeed comes with a likely much higher cost.

Inflation and recessions typically hurt those with less—those who have a hard time coping with rising prices on essentials, fear losing their jobs, or who live on their investments and fear selling stocks at a loss. Those with a good cushion are usually OK and often poopoo the cries of others. The haves will likely come out of the current economic turmoil in one piece. That’s the lesson here: If you NEED to spend what you CAN spend, beware.

All that said, counting on what is called above “that elusive soft landing” in 2025 feels like one too many lines of coke to me LOL. We shall see.

[PeteD01]

...
I want to help out the kids in the family who really need it, but I’m not sure that foregoing my own assistance or giving another loan to Uncle Sam are the best way forward.  Any thoughts on this?

Well, I would first consider that government activity is not remotely comparable to corporate activity, so using a family business that is being dramatically looted by irresponsible cocaine fueled company officers as an example is not going to explain much.

Here is a JP Morgan opinion that is just as good as anyone else’s (just ignore the investment advice):

How worried should you be about the U.S. debt and deficit?
June 28, 2024

Conclusion: Endgames for policymakers and investors
The most likely scenario for the next few years is the status quo: Deficits remain wide and debt levels continue to rise. Despite the associated risks, we believe these won't destabilize multi-asset portfolios due to the credibility of policymakers, ongoing investor demand for U.S. Treasury assets and a robust tax base.

There are methods to address the debt problem. One option is preemptive fiscal reform, which could involve altering entitlement or discretionary spending, and/or raising taxes on high-net-worth individuals or corporations. Another is higher economic growth through productivity gains. Specifically, advancements in artificial intelligence could enhance fiscal sustainability by boosting economic output without causing inflation. The CBO (Congressional Budget Office) does not, and has not historically, forecasted these types of productivity booms.

Finally, we should note that the CBO has shown a tendency to develop overly pessimistic projections for the U.S. debt and deficits. For instance, in 2009 the CBO projected that mandatory government spending would outstrip total U.S. revenues by 2024. That intersection has been revised further into the future to 2034.

https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-how-worried-should-you-be-about-the-us-debt-and-deficit

5 years ago the "experts" also said we didn't have to worry about inflation.

It´s one thing to "worry" about inflation and another to accept inflation as an inevitable consequence of fiscal stimuli sufficient to avoid a recession or speed up recovery from a recession.

The consequences of insufficient economic stimulus, in form of a protracted and therefore painful recovery from the financial crisis of 2008 because of all the bad things that are supposedly going to happen when the purse strings are loosened too much, led to a much more vigorous stimulus post-Covid.

But the Fed put on the brakes and got inflation under control (2.5% currently) and is now deftly reducing interest rates again and might just engineer that elusive soft landing.

This is not to say that inflation is not hurting people but the consequences of attempting to avoid a spike in inflation at all cost indeed comes with a likely much higher cost.

Inflation and recessions typically hurt those with less—those who have a hard time coping with rising prices on essentials, fear losing their jobs, or who live on their investments and fear selling stocks at a loss. Those with a good cushion are usually OK and often poopoo the cries of others. The haves will likely come out of the current economic turmoil in one piece. That’s the lesson here: If you NEED to spend what you CAN spend, beware.

All that said, counting on what is called above “that elusive soft landing” in 2025 feels like one too many lines of coke to me LOL. We shall see.

Don´t forget debtors who benefit from inflation by the decrease in real value of their liability - which would be an example where those with less benefit from inflation.

And then there are the bondholders who suffer a decrease in real value of their holdings that increasing interest rates cannot compensate for - this would be an example of those who have wealth are suffering from inflation.

Given that private sector debt not only significantly exceeds government debt but is also lent at much higher interest rates, which also suffers from decrease in real value as well as a lower rates if the credit was issued prior to rate increases, than government debt, periods of inflation are times of massive write-downs of real value of private sector debt. One could interpret that as a kind of stimulus.

There is no question that inflation causes widespread economic pressure but the recovery of the labor market is arguably even more important than effective anti-inflation measures via rate increases.

The labor market recovery after 2008 was one of the slowest in history and the damage done likely far exceeds that which would have resulted from a spike in inflation which would have occurred if the stimulus had been sufficient.

Here is a summary of what went wrong and why no-one was eager to revisit a snail's pace labor market recovery:

Why is recovery taking so long—and who’s to blame?
Report • By Josh Bivens • August 11, 2016

Conclusion
The recovery since 2009 has been historically slow, and the disappointing pace can be explained entirely by the fiscal austerity imposed by Republicans in Congress.

Of course, other national policymakers are not completely blameless. While the Federal Reserve pushed beyond the bounds of conventional monetary policy to fight the recession and aid recovery, there are reasons to think that it could have done more. The Obama administration issued several calls for more expansionary fiscal policy (like the American Jobs Act of 2010), but it had no unilateral power to pass more expansionary policy. Yet it could have made a louder and more consistent case that the slow recovery had concrete, identifiable roots in decisions made by Congress. Had the Obama administration made such a powerful case for why austerity was hampering growth, it could have educated the public and potentially helped build support for more sensible policy the next time the United States faces a recession.

But these caveats about the Fed and the Obama administration are mostly quibbling. By far the biggest drag on growth throughout the recovery from the Great Recession has been the fiscal policy forced upon us by Republican lawmakers in Congress and austerity-minded state legislatures and governors.

https://www.epi.org/publication/why-is-recovery-taking-so-long-and-who-is-to-blame/#epi-toc-5

[Ron Scott]

...
I want to help out the kids in the family who really need it, but I’m not sure that foregoing my own assistance or giving another loan to Uncle Sam are the best way forward.  Any thoughts on this?

Well, I would first consider that government activity is not remotely comparable to corporate activity, so using a family business that is being dramatically looted by irresponsible cocaine fueled company officers as an example is not going to explain much.

Here is a JP Morgan opinion that is just as good as anyone else’s (just ignore the investment advice):

How worried should you be about the U.S. debt and deficit?
June 28, 2024

Conclusion: Endgames for policymakers and investors
The most likely scenario for the next few years is the status quo: Deficits remain wide and debt levels continue to rise. Despite the associated risks, we believe these won't destabilize multi-asset portfolios due to the credibility of policymakers, ongoing investor demand for U.S. Treasury assets and a robust tax base.

There are methods to address the debt problem. One option is preemptive fiscal reform, which could involve altering entitlement or discretionary spending, and/or raising taxes on high-net-worth individuals or corporations. Another is higher economic growth through productivity gains. Specifically, advancements in artificial intelligence could enhance fiscal sustainability by boosting economic output without causing inflation. The CBO (Congressional Budget Office) does not, and has not historically, forecasted these types of productivity booms.

Finally, we should note that the CBO has shown a tendency to develop overly pessimistic projections for the U.S. debt and deficits. For instance, in 2009 the CBO projected that mandatory government spending would outstrip total U.S. revenues by 2024. That intersection has been revised further into the future to 2034.

https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-how-worried-should-you-be-about-the-us-debt-and-deficit

5 years ago the "experts" also said we didn't have to worry about inflation.

It´s one thing to "worry" about inflation and another to accept inflation as an inevitable consequence of fiscal stimuli sufficient to avoid a recession or speed up recovery from a recession.

The consequences of insufficient economic stimulus, in form of a protracted and therefore painful recovery from the financial crisis of 2008 because of all the bad things that are supposedly going to happen when the purse strings are loosened too much, led to a much more vigorous stimulus post-Covid.

But the Fed put on the brakes and got inflation under control (2.5% currently) and is now deftly reducing interest rates again and might just engineer that elusive soft landing.

This is not to say that inflation is not hurting people but the consequences of attempting to avoid a spike in inflation at all cost indeed comes with a likely much higher cost.

Inflation and recessions typically hurt those with less—those who have a hard time coping with rising prices on essentials, fear losing their jobs, or who live on their investments and fear selling stocks at a loss. Those with a good cushion are usually OK and often poopoo the cries of others. The haves will likely come out of the current economic turmoil in one piece. That’s the lesson here: If you NEED to spend what you CAN spend, beware.

All that said, counting on what is called above “that elusive soft landing” in 2025 feels like one too many lines of coke to me LOL. We shall see.

Don´t forget debtors who benefit from inflation by the decrease in real value of their liability - which would be an example where those with less benefit from inflation.

And then there are the bondholders who suffer a decrease in real value of their holdings that increasing interest rates cannot compensate for - this would be an example of those who have wealth are suffering from inflation.

Given that private sector debt not only significantly exceeds government debt but is also lent at much higher interest rates, which also suffers from decrease in real value as well as a lower rates if the credit was issued prior to rate increases, than government debt, periods of inflation are times of massive write-downs of real value of private sector debt. One could interpret that as a kind of stimulus.

There is no question that inflation causes widespread economic pressure but the recovery of the labor market is arguably even more important than effective anti-inflation measures via rate increases.

The labor market recovery after 2008 was one of the slowest in history and the damage done likely far exceeds that which would have resulted from a spike in inflation which would have occurred if the stimulus had been sufficient.

Here is a summary of what went wrong and why no-one was eager to revisit a snail's pace labor market recovery:

Why is recovery taking so long—and who’s to blame?
Report • By Josh Bivens • August 11, 2016

Conclusion
The recovery since 2009 has been historically slow, and the disappointing pace can be explained entirely by the fiscal austerity imposed by Republicans in Congress.

Of course, other national policymakers are not completely blameless. While the Federal Reserve pushed beyond the bounds of conventional monetary policy to fight the recession and aid recovery, there are reasons to think that it could have done more. The Obama administration issued several calls for more expansionary fiscal policy (like the American Jobs Act of 2010), but it had no unilateral power to pass more expansionary policy. Yet it could have made a louder and more consistent case that the slow recovery had concrete, identifiable roots in decisions made by Congress. Had the Obama administration made such a powerful case for why austerity was hampering growth, it could have educated the public and potentially helped build support for more sensible policy the next time the United States faces a recession.

But these caveats about the Fed and the Obama administration are mostly quibbling. By far the biggest drag on growth throughout the recovery from the Great Recession has been the fiscal policy forced upon us by Republican lawmakers in Congress and austerity-minded state legislatures and governors.

https://www.epi.org/publication/why-is-recovery-taking-so-long-and-who-is-to-blame/#epi-toc-5

Having an argument with “some truth” to it doesn’t explain most complex economic situations and this is a great example. The facts that this recession affected the developed world and not just a few nations, that it was a banking crisis which differs fundamentally from other recessions, and that immediate bipartisan stimulus legislation didn’t help enough to speed recovery, are all important to consider.

A single source argument that points the finger at a simple causes—especially casting political blame—serves more to confuse than educate IMO.

[PeteD01]

...
I want to help out the kids in the family who really need it, but I’m not sure that foregoing my own assistance or giving another loan to Uncle Sam are the best way forward.  Any thoughts on this?

Well, I would first consider that government activity is not remotely comparable to corporate activity, so using a family business that is being dramatically looted by irresponsible cocaine fueled company officers as an example is not going to explain much.

Here is a JP Morgan opinion that is just as good as anyone else’s (just ignore the investment advice):

How worried should you be about the U.S. debt and deficit?
June 28, 2024

Conclusion: Endgames for policymakers and investors
The most likely scenario for the next few years is the status quo: Deficits remain wide and debt levels continue to rise. Despite the associated risks, we believe these won't destabilize multi-asset portfolios due to the credibility of policymakers, ongoing investor demand for U.S. Treasury assets and a robust tax base.

There are methods to address the debt problem. One option is preemptive fiscal reform, which could involve altering entitlement or discretionary spending, and/or raising taxes on high-net-worth individuals or corporations. Another is higher economic growth through productivity gains. Specifically, advancements in artificial intelligence could enhance fiscal sustainability by boosting economic output without causing inflation. The CBO (Congressional Budget Office) does not, and has not historically, forecasted these types of productivity booms.

Finally, we should note that the CBO has shown a tendency to develop overly pessimistic projections for the U.S. debt and deficits. For instance, in 2009 the CBO projected that mandatory government spending would outstrip total U.S. revenues by 2024. That intersection has been revised further into the future to 2034.

https://www.jpmorgan.com/insights/markets/top-market-takeaways/tmt-how-worried-should-you-be-about-the-us-debt-and-deficit

5 years ago the "experts" also said we didn't have to worry about inflation.

It´s one thing to "worry" about inflation and another to accept inflation as an inevitable consequence of fiscal stimuli sufficient to avoid a recession or speed up recovery from a recession.

The consequences of insufficient economic stimulus, in form of a protracted and therefore painful recovery from the financial crisis of 2008 because of all the bad things that are supposedly going to happen when the purse strings are loosened too much, led to a much more vigorous stimulus post-Covid.

But the Fed put on the brakes and got inflation under control (2.5% currently) and is now deftly reducing interest rates again and might just engineer that elusive soft landing.

This is not to say that inflation is not hurting people but the consequences of attempting to avoid a spike in inflation at all cost indeed comes with a likely much higher cost.

Inflation and recessions typically hurt those with less—those who have a hard time coping with rising prices on essentials, fear losing their jobs, or who live on their investments and fear selling stocks at a loss. Those with a good cushion are usually OK and often poopoo the cries of others. The haves will likely come out of the current economic turmoil in one piece. That’s the lesson here: If you NEED to spend what you CAN spend, beware.

All that said, counting on what is called above “that elusive soft landing” in 2025 feels like one too many lines of coke to me LOL. We shall see.

Don´t forget debtors who benefit from inflation by the decrease in real value of their liability - which would be an example where those with less benefit from inflation.

And then there are the bondholders who suffer a decrease in real value of their holdings that increasing interest rates cannot compensate for - this would be an example of those who have wealth are suffering from inflation.

Given that private sector debt not only significantly exceeds government debt but is also lent at much higher interest rates, which also suffers from decrease in real value as well as a lower rates if the credit was issued prior to rate increases, than government debt, periods of inflation are times of massive write-downs of real value of private sector debt. One could interpret that as a kind of stimulus.

There is no question that inflation causes widespread economic pressure but the recovery of the labor market is arguably even more important than effective anti-inflation measures via rate increases.

The labor market recovery after 2008 was one of the slowest in history and the damage done likely far exceeds that which would have resulted from a spike in inflation which would have occurred if the stimulus had been sufficient.

Here is a summary of what went wrong and why no-one was eager to revisit a snail's pace labor market recovery:

Why is recovery taking so long—and who’s to blame?
Report • By Josh Bivens • August 11, 2016

Conclusion
The recovery since 2009 has been historically slow, and the disappointing pace can be explained entirely by the fiscal austerity imposed by Republicans in Congress.

Of course, other national policymakers are not completely blameless. While the Federal Reserve pushed beyond the bounds of conventional monetary policy to fight the recession and aid recovery, there are reasons to think that it could have done more. The Obama administration issued several calls for more expansionary fiscal policy (like the American Jobs Act of 2010), but it had no unilateral power to pass more expansionary policy. Yet it could have made a louder and more consistent case that the slow recovery had concrete, identifiable roots in decisions made by Congress. Had the Obama administration made such a powerful case for why austerity was hampering growth, it could have educated the public and potentially helped build support for more sensible policy the next time the United States faces a recession.

But these caveats about the Fed and the Obama administration are mostly quibbling. By far the biggest drag on growth throughout the recovery from the Great Recession has been the fiscal policy forced upon us by Republican lawmakers in Congress and austerity-minded state legislatures and governors.

https://www.epi.org/publication/why-is-recovery-taking-so-long-and-who-is-to-blame/#epi-toc-5

Having an argument with “some truth” to it doesn’t explain most complex economic situations and this is a great example. The facts that this recession affected the developed world and not just a few nations, that it was a banking crisis which differs fundamentally from other recessions, and that immediate bipartisan stimulus legislation didn’t help enough to speed recovery, are all important to consider.

A single source argument that points the finger at a simple causes—especially casting political blame—serves more to confuse than educate IMO.

The problem is that
1. this recession affected the developed world and not just a few nations
is also true for the post-Covid situation, and
2. banking crisis which differs fundamentally from other recessions
are both not actionable because there is nothing one can change about it.

3. immediate bipartisan stimulus legislation didn’t help enough to speed recovery
which is the only actionable issue and the failure to adequately support demand likely worsened the economic impact unnecessarily and prolonged recovery.

4. especially casting political blame—serves more to confuse than educate IMO

BS, there is some blame to share with lots of the stimuli going to corporations instead of going to support consumer demand.

Thus, the political blame goes to supporters of supply side economics and that's why we are now looking at a Keynesian approach.

[Ron Scott]

While I haven’t changed my opinion on eliminating benefits for those who clearly have no need for them I’d like to point out that this whole decades-long, sky-is-falling, doomsday SS shortfall story is more charade than factual, a deceptive line of reasoning perpetuated by both parties for their own strategic reasons.

First, as discussed frequently here, the only real problem with just creating the money to pay for any “shortfall” is having to deal with the inflationary pressures that adding money to a fiat economy may cause. There are times the economy can absorb it well and there are tools for spikes in inflation.

Second, consider that the parties ROUTINELY spend fortunes on programs and tax cuts that could more than pay for any SS shortfalls.

Consider the 2017 tax cuts as an example (you can decide for yourself how to consider the 3X Pandemic Relief giveaways):

ANNUAL COST OF THE TAX CUTS: The Joint Committee on Taxation and Congressional Budget Office estimates, the Tax Cuts and Jobs Act of 2017 is estimated to increase federal deficits by approximately $1.5 trillion to $1.9 trillion over a 10-year period (2018-2027), or roughly $150-190 billion annually on average.

…and the SS shortfall…

ANNUAL SS SHORTFALL: Based on the 2024 Social Security Trustees Report projections, when the program's costs first exceed its total income (including both payroll taxes and interest on reserves), the annual deficit is expected to be around $125 billion initially…growing over time.

So at least for some years the Trump tax cuts cost say $150B a year when the SS deficit is about $125B+.

The parties rarely conflate the trade-offs involved with their favored programs. They usually keep them separately so they can discuss them in a vacuum. Do you remember a big debate in Congress about salvaging SS vs. implementing the 2017 tax cuts? Neither do I.

Sadly, our media don’t help us much either.

[Psychstache]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw.

That “sounds” logical to some extent but when I was working I knew people who lived in Florida, Tennessee, and Texas—none of which have an income tax—and they loved it. All strong economies, good infrastructure, beautiful nature and a reasonable amount of culture.

I on the other hand am more like Fran Lebowitz, who famously said “People tell me ‘Why don’t you leave NY?’ Well sure, I’d love to leave, but where can you go…?”

I have lived in Texas my whole life and largely disagree with the bolded.

[jrhampt]

^^^ hahaha, that was my first reaction, too. 

[Fomerly known as something]

Maybe the beautiful nature is people who have never left Texas?

[LiveLean]

I'd like the option to forfeit SS if I can take Medicare at 55.

[jrhampt]

Maybe the beautiful nature is people who have never left Texas?

Lol, maybe?  Most of my friends who still live there rarely spend time outdoors.  Part of that is probably weather-related.

[wenchsenior]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw.

That “sounds” logical to some extent but when I was working I knew people who lived in Florida, Tennessee, and Texas—none of which have an income tax—and they loved it. All strong economies, good infrastructure, beautiful nature and a reasonable amount of culture.

I on the other hand am more like Fran Lebowitz, who famously said “People tell me ‘Why don’t you leave NY?’ Well sure, I’d love to leave, but where can you go…?”

I have lived in Texas my whole life and largely disagree with the bolded.

I'm pretty sure the majority of the people really impressed by Texas are people who are born there and never lived any substantive time anywhere else, so they don't realize how subpar most things about Texas are.

I think Texas attitude toward infrastructure and public services can be summed up by the fact that most of their highway 'rest stops' have no toilets. That's Texas in a nutshell.

[nereo]

I think Texas attitude toward infrastructure and public services can be summed up by the fact that most of their highway 'rest stops' have no toilets. That's Texas in a nutshell.

what...???  How do people go to the bathroom then?

[wenchsenior]

I think Texas attitude toward infrastructure and public services can be summed up by the fact that most of their highway 'rest stops' have no toilets. That's Texas in a nutshell.

what...???  How do people go to the bathroom then?

In the bushes, one assumes.

[jrhampt]

Not much in the way of vegetation for cover, either.

[classicrando]

I think Texas attitude toward infrastructure and public services can be summed up by the fact that most of their highway 'rest stops' have no toilets. That's Texas in a nutshell.

what...???  How do people go to the bathroom then?

In the bushes, one assumes.

I was imagining just a field of catholes as far as the eye can see.  Little mounds everywhere; like the least-adorable prairie dog infestation.

[reeshau]

I think Texas attitude toward infrastructure and public services can be summed up by the fact that most of their highway 'rest stops' have no toilets. That's Texas in a nutshell.

what...???  How do people go to the bathroom then?

I always laughed as we drove through Wisconsin around Christmas.  Yes, there are bathrooms at the rest stops.  No, they are not heated!