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Monday, Sep. 22, 2014

Top 5 Social Security Myths

Posted Thursday, July 29, 2010, at 3:44 PM

(Photo)
Yet another mythbuster, this one on taxes. You have to hate when facts get in the way of rhetoric.
This list was originally composed by MoveOn so I know it will be highly criticized, but really when you actually look at the points instead of focusing on who released it their list of myths are absolutely correct.

Original post can be found here

Myth One: Social Security is going broke

There is actually no verifiable information to support the going broke myth. Even by conservative standards Social Security would still be paying at 75% AFTER 2034. That is with absolute no changed to Social Security between now and then.

Myth Two: We have to raise the retirement age because people are living longer

While it may seem that people are living longer our life expectancy has not actually risen that much since 1930. As the link points out that while workers in the top half of the income brackets are living on average 6.5 years longer since 1972 but as you go down the scale so to does the life expectancy which by the time you get to the lower levels of the income brackets the rate is only 2 years longer. The only reason to raise the retirement age is so that those that are trying to close out Social Security can get an across the board cut. But fiscally it does not actually make any sense and it adds nothing to Social Security.

Myth Three: Benefit cuts are the only way to fix Social Security

I know of no one that actually would want to fix Social Security that believe that this would do anything to fix it. In fact it would further hurt Social Security. I better system to at the very least strengthen Social Security is to raise the level at which payments into Social Security should be cut off. Right now it stands $106,000 and that rate gets us to at least 2037 before Social Security would be unable to pay 100% and again that's with no fixes.

Myth Four: The Social Security Fund has been raided and is full of IOUs.

The original comments on this myth are better than what I could say. "The Social Security Trust Fund isn't full of IOUs, it's full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States.7 The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts." Of course you would never know that if you only listened to the side that wants to destroy Social Security. This does go along with Myth One. If Social Security can pay in full to at least 2037, with no fixes, than that busted myth immediately busts this myth.

Myth Five: Social Security adds to the deficit.

This myth is just so ridiculous it is hard to imagine that enough people believed in it that it became a myth in the first place. Social Security is, by law, separate from the budget. This simple little law makes it impossible for Social Security to add even a tenth of a penny to the deficit.

The flat out bottom line is that despite what we have been told for close to at least twenty years by different Republican administrations Social Security is fine and it is in no immediate (at least 27 years with absolutely no fixes) threat of going broke. The people that want you to believe that it is going broke (or even the bigger lie, already broke) and there is no way you will have Social Security by the time you retire are the same people that want to completely dismantle it. Why else would they spread these lies myths in the first place.

The sadder part of this is that if people just looked into the myths that were being spread about Social Security they would see quite immediately how weak the argument is to begin with.


Comments
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I agree with most of the people commented here. Everyone's taxes would go up that is correct but the effect on the discrepancy would actually be something Republicans favor since they want to cut and letting all the tax cuts expire will do that. But since the Democrats aren't planning on doing that it's a mute point.

Regards

data recovery

http://www.datadoctor.biz

-- Posted by recovery data on Tue, Aug 17, 2010, at 11:39 PM

My prior posts were related to the fact that I hadn't seen any concrete plans with a breakdown of the new income classifications and rates and didn't want to speculate on how the new income classifications would be redone. My last post was simply a thank you to G.I. for the info and stated how that info was reflected in the chart above.

-- Posted by McCook1 on Fri, Aug 13, 2010, at 3:43 PM

Do you have a point with your post McCook? It's been said pretty clearly since 2008 that the Bush-era tax cuts for those making under $250,000 were not going to expire.

-- Posted by MichaelHendricks on Fri, Aug 13, 2010, at 2:32 PM

Thanks, G.I. Now that chart makes more sense. The money saved in the lower income levels is not from a reduction in the tax rate for those in the lower income brackets. It is simply an extension of the Making Work Pay credit which will only be effective for one year so those savings over the Bush tax cuts as shown in the chart, will only be good for one year and then they will be back to where they were under Bush's tax cuts.

-- Posted by McCook1 on Fri, Aug 13, 2010, at 10:52 AM

Seems pretty straight forward and clear to me. Thank you for the link GI

-- Posted by MichaelHendricks on Thu, Aug 12, 2010, at 3:09 PM

G.I.,

I've searched the White House website for the breakdown but could not find it. I also hadn't heard of any bill proposed or endorsed by Obama in either House of Congress so I there were no Bill numbers to look up on the House and Senate sites. It does sound like there is something out there based on that article but it's not readily available to the public.

Mike,

Ok, so what are the new tax rates proposed to be for those in the lower income brackets?

-- Posted by McCook1 on Thu, Aug 12, 2010, at 1:11 PM

Oh by the way McCook you know the graph that is at the top of the screen? Those are part of new tax structure planned in Obama's version of the tax cuts that you continue to swear you have seen no plans for.

-- Posted by MichaelHendricks on Thu, Aug 12, 2010, at 11:08 AM

In another stunner (dripping with sarcasm) Republicans voted against a state-aid bill that will fund such people as firefighters, police officers, and teachers. For all of their grand standing about deficit spending (except when it comes to tax cuts then all they want is spend, spend, spend) this bill was actually deficit neutral (in other words it didn't add or subtract from the deficit). It was the perfect bill for them yet they still vote en masse against the bill.

So far this election season they have targeted gays, latinos, 9/11 workers, fire fighters, police officers, teachers, the middle class, and the lower class.

-- Posted by MichaelHendricks on Thu, Aug 12, 2010, at 9:52 AM

At least wait until Obama presents the revised tax brackets. With $250,000 as the new cutoff for a tax bracket that means that people will be reshuffled into tax brackets they weren't in before. The 33% bracket for a married couple is currently set for those making $209,250 -$373,650. Since $250,000 falls in between that range, the tax bracket would need to be rewritten. It wouldn't make much sense to have such a narrow 33% tax bracket of $209,250 - $249,999. Then you have to figure the people who were in the $250,000 - $373,650 range, actually get 2 sets of tax increases. First, is the portion of their income that is still in the 33% bracket goes up to 36% and second, is the portion of their income over $250,000 that was taxed at 33% before will now be taxed 39.6%.

If they move the base of the 33% bracket down from $209,250 to something like $180,000 or whatever the number then the people who were paying 28% on that income would be paying 36% with the tax increase to Bush levels mixed with the reclassified charts.

However, every scenario I listed is just as hypothetical as their chart because I don't have the revised charts either. It's just an example of how setting the cutoff at $250,000 has a very real potential to change things for people under that amount. It also shows that it's not as simple as just letting Bush tax cuts expire and everyone goes back to what they were paying before. The multi-millionaires have more capital to cover their losses but the couple running their small business which is taxed at a $300,000 income level will get a big shock when tax season rolls around because not only will their taxes go back to 36% part of their income will be taxed at 39.6% which was not the case, even at pre-Bush levels.

-- Posted by McCook1 on Wed, Aug 11, 2010, at 11:34 AM

Then what would you have them do with the tax cuts?

-- Posted by MichaelHendricks on Wed, Aug 11, 2010, at 7:58 AM

Ok, my bad. I must have been confusing the sourch for the list with the graph. The Tax Foundation was wrong then. There are still a lot of assumptions to reach those numbers and I scoured that entire budget file and there were only sporatic snippits about raising taxes on wealthy people but no tax brackets or breakdowns to get accurate numbers.

-- Posted by McCook1 on Tue, Aug 10, 2010, at 7:28 PM

I should correct myself. The original story that I got the graph from was from the Washington Post but the original story came The Tax Foundation who did the study to begin with.

Here is the original story but instead of a graph the same information is in a table.

http://www.taxfoundation.org/publication...

-- Posted by MichaelHendricks on Tue, Aug 10, 2010, at 1:19 PM

This graph appeared on the Washington Post's website. They did the original story that had that graph, not moveon.org

-- Posted by MichaelHendricks on Tue, Aug 10, 2010, at 1:12 PM

Mike,

When I have nothing more to argue or grow tired of arguing then I stop arguing. It has nothing to do with someone's intelligence. Sometimes, intelligence should be questioned on complex matters. I can talk about what is needed to get an accurate idea of what the new tax structure will look like but if somebody doesn't realize that then they will be lost. I apologize if I came on a little strong but I do think you are smarter than that. I think you understand we need actual details of Obama's plan but he hasn't presented those details yet and it frustrates you that he hasn't presented that yet so that you can back up the numbers in the chart you used. That's not my fault and it's not your fault but you seem awfully defensive about it when you know he hasn't come out with a actual plan yet. A brief message in a budget statement and soundbyte in a speech is not a plan and it's certainly not a plan that can be used to generate a chart like the one you used above.

When he has a more specific plan we can review it but until then, nobody really knows what the new brackets will look like and the chart you referenced for this topic has absolutely no merit without the new tax brackets, as presented by Obama. The chart you used would indicate a lower tax rate for lower income levels but I have not seen any of those details for the various income levels from Obama that would be needed to arrive at that conclusion.

Btw, I don't recall thinking I've won any arguments on here. I just present my side, address the other side and repeat until I grow tired of it and then let the chips fall where they may.

I honestly thought you knew a person would need a tax classificaton chart to accurately assess any new tax bill that changes the cutoff for a tax bracket at $250,000 along with the new rates. The fact is that you don't know what the new tax brackets will look like under Obama's plan because he hasn't presented one to the public or Congress yet. I believe you know this, you wish he had presented something by now but he hasn't and you seem to be looking for a solid plan where he hasn't presented one yet. Like I said earlier, when he has an actual plan presented then we can assess the details of that plan but until then, your chart is not accurate. I question it not because of where it came from but because there are no details available of his plan to put that data together. Whoever put that chart together did one of three things: they either just picked out some numbers or more likely, they made assumptions of Obama's plans that can not be shown to be a part of his actual plan. The third thing would be that Obama has a plan but instead of making it public, gave it to this one group and they used his actual numbers but I highly doubt moveon.org would get details of his tax bill from him before Congress did.

-- Posted by McCook1 on Tue, Aug 10, 2010, at 10:06 AM

You know I continue to notice from post after post from you that when either you think you have won an argument or you have have nothing more to argue you always constantly and without fail turn to questioning people's intelligence. Why is that?

-- Posted by MichaelHendricks on Mon, Aug 9, 2010, at 6:23 PM

Mike,

You call that "very clearly"?! All that was is a political statement to introduce his budget and restates the vagueness of his speeches. That's all any Budget Intro has ever been from the White House. It doesn't lay out the details. But just to play along, where is the President's site that lays out the new tax brackets and tax rates? If the cut off for one of the tax brackets is going to be $250,000 that means the tax brackets need to be rewritten with the corresponding rates. Just point me to where that information is and I'll review it. You know I was looking for the actual tax plan that REQUIRES an itemization of the income wage level with the corresponding tax rate classification chart. Without that, you can't get an accurate reflection of what the new income classifications will be set at. Why you sent me to more rhetoric as evidence of his detailed plan has got me scratching my head. I thought you were smarter than or maybe you must have thought I would just be okay with it since it was in a budget message instead of a normal speech like usual.

-- Posted by McCook1 on Mon, Aug 9, 2010, at 5:27 PM

Actually the tax increase will only affect about 2% of small businesses.

What's pretty sad is that you expect any of us to believe your last post. You have been caught in lie after lie, so why should we believe you? Because you saw it on BBC? We get BBC in the United States. I'm sure your assumptions will probably surprise most Europeans. But then again you have to keep up your theme about how stupid Obama is so what's a little white lie between friends?

Seriously what was the point of that last post other than taking as many pot shots at Obama as you can. I get wallis, we all get it. You hate Obama with every fiber in your being. You don't respect him so it gives you the excuse to treat him like he is second class to you and you get to say things about him that you abhorred "liberals" saying about Bush. We get it, it's pay back time.

But you don't have to lie about information.

-- Posted by MichaelHendricks on Mon, Aug 9, 2010, at 9:52 AM

I have been in Europe for the last 10 days. They Europeans have certainly "gotten over" their love affair with Obama. They have come to realize that he and his administration have no workable plan for the economy, no workable plan for Iraq, no workable plan for Afghanistan, no workable plan for Iran.

The Obama administration actually blamed Europe for not complying with global warming measures and blamed Europe for the rain in Pakistan. That was on BBC and I saw it with my own eyes. Obama on the BBC discussed his Energy and Climate Chief. Do we have an Energy and Climate Chief.

By the way, a lot of Americans have thought that the Obama administration was pretty naive for a long time also.

It is pretty sad at how stupid Europe thinks Obama is.

-- Posted by wallismarsh on Mon, Aug 9, 2010, at 9:43 AM

Mike - You make my point. Most small business's are owned by individuals that have flow through income. They earn more than $250,000 a year (most of that is on paper) and they are going to pay more taxes under the Obama plan. That is going to hurt employment.

-- Posted by wallismarsh on Mon, Aug 9, 2010, at 9:37 AM

McCook you have continually said that you have seen no details, even though Obama laid out his plans very clearly before and after his election to let the tax cuts expire for those making over $250,000. But you needed more proof.

So here is a passage from Obama's Fiscal 2011 plan:

In addition to closing loopholes that allow wealthy investment managers to not pay income taxes on their earnings and ending subsidies for big oil, gas, and coal companies, the Budget eliminates the Bush tax cuts for those making more than $250,000 a year and devotes those resources instead to reducing the deficit. Our Nation could not afford these tax cuts when they passed, and it cannot afford them now.

It appears on page 4.

Just in case you don't believe me on that here is the link to the entire fiscal plan (caution it's pretty big):

http://www.whitehouse.gov/sites/default/...

-- Posted by MichaelHendricks on Fri, Aug 6, 2010, at 6:11 PM

So I guess the job market is going to improve thanks to Obama's policies? I don't see it guys. But what do I know? According to you guys you are always right and I am always wrong.

I am curious, what do you do for a living GI and Senior? Since I am a business guy and own several business's and employ many and don't have a clue, I wonder what the qualifications are of the guys calling me wrong and calling me out.

I know Mike is a sub teacher but I have no clue what you guys do.

Again, I am public to the board as is Mike but you guys hide behind your shield.

-- Posted by wallismarsh on Fri, Aug 6, 2010, at 2:28 PM

Something delightfully hypocritical happened today. Republicans put out a bill they would like to pass. They call it a jobs bill (though there is actually no attempt at creating jobs in it). What this "jobs" bill will do is not only extend the Bush tax cuts but make them bigger for the richest in our society. Not only that they propose to elminate most taxes that are levereged against the rich.

The bottom line is that there plan will more than triple the deficit by 2015. Here we were being told by Republicans and posters (most notably the last poster by many names but as we grew to know him as edmundburke) on this site that Republicans wanted to cut the deficit.

Isn't politics fun, especially when these guys want to return us to the policies that put us in this hole to begin with not to mention the same group that has filibustered every jobs bill and deficit cutting bill that has come to Congress over the last two years.

-- Posted by MichaelHendricks on Thu, Aug 5, 2010, at 4:01 PM

I'll go ahead and address that one. It is perfectly fine to do this McCook but to this point projected out nothing Obama has actually gotten passed even matches the spending under the two wars or the tax cuts combined.

I guess I am still confused at why you want to discuss the deficit so much and ways to decrease that deficit but you are completely (apparently) opposed to cutting the deficit by letting the top tax cuts expire. You let the top tax cuts expire you no longer have to pay for them. It is rather simple.

-- Posted by MichaelHendricks on Wed, Aug 4, 2010, at 1:09 AM

G.I.

It's not misconstruing anything. If you see that article, pointing out the largest amounts of new spending as what led to a deficit then you must apply that same reasoning when addressing the deficit under Obama with the same diligence. You obviously think that article is worth noting about why the deficit is where it was under Bush. You even go so far as to say the way they figured the deficit is not debatable yet you debate it when asked to be held to the same logic. So why won't you hold the person or policies you support to the same standard?

-- Posted by McCook1 on Wed, Aug 4, 2010, at 12:40 AM

Always the first to attack always the first to ask for the attacks huh wallis?

Considering that 98.6% of small businesses will NOT be affected with the plan that Obama and Democrats want to pass it is very disingenuous to say that most WILL be affected.

"This is one of the reasons that business' are not hiring like some would like and the unemployment rate is likely to go up."

This phrase is also confusing me. Are you suggesting that because small businesses are getting bad information on what some think will happen they are not hiring in advance?

A new study out states that businesses are using the recession as an excuse NOT to hire new employees so that they can make more profits.

-- Posted by MichaelHendricks on Tue, Aug 3, 2010, at 9:34 PM

G.I.

Alright then. When the new health insurance costs come in, you have to blame that total amount for any deficit that is present at the time since you think you should only count the total of new spending. That's using your opinion that only new spending should be blamed for the deficit.

-- Posted by McCook1 on Tue, Aug 3, 2010, at 6:45 PM

G.I.,

It is cherry picking because they only recognize the INCREASES in domestic programs not the programs themselves which still contribute to our bottom line. They are comparing yearly increases in entitlement programs to the total yearly amount for the tax cuts. So, if the entitlement programs cost say, $539 billion in year one and the tax cuts cost $539 Billion in year one then they look at year two and say entitlements go up to $560 Billion so they count the $21 Billion increase but if tax cuts in year two go up to $560 Billion then they count the entire 560 Billion even though their increase over year one would be identical. They're comparing apples to oranges.

When the health care program starts costing us each year do you want to compare its total budget to only the increase in military spending as a way of defending what the military contributes to the deficit as opposed to the new health insurance program? I guarantee the new health insurance program will be much higher than the increases in military spending.

-- Posted by McCook1 on Tue, Aug 3, 2010, at 4:10 PM

Has congress passed the new tax laws?

Most small business' are flow through and those taxes will rise. Those are S corps and LLC and limited partnerships. Also for the owner of the flow through entities they are more often than not the subject to AMT so their deductions are eliminated. Therefore, most small business' will see their taxes go up. Just look at your chart. Also keep in mind that the Bush numbers are higher than they are for 2010. Therefore, President Obama is proposing to raise the tax on small business that utilize LLC, S corps and Partnerships by greater than 15%.

This is one of the reasons that business' are not hiring like some would like and the unemployment rate is likely to go up.

OK my liberal friends - fire away with your attacks.

-- Posted by wallismarsh on Tue, Aug 3, 2010, at 3:55 PM

G.I.,

They have been talking about this for over 2 years. They should have proposals ready by now. To wait until fall, with the deadline coming up, just doesn't make sense. They pushed tooth and nail to get healthcare passed and they didn't have a deadline to meet. At the very least they could try putting their proposals out there for everybody to see. I don't think that is asking too much to just be able to see what they plan to propose because if they don't know what they want to do by now then they are not going to have a strong bill. All I ask is to share that with us so we can come to an informed opinion and other members of Congress can get a head start on getting this passed and get the easy part like reading the details of the bill done before it comes up for a vote. All I want them to do is stop dragging their feet on the issue by saying they're going to wait a little longer. I believe they've been putting it off for long enough. It may not be the best bill that ends up being passed but putting this off even longer is just ridiculous. That goes for both sides too because I haven't seen Republicans introducing any bills either.

That article is correct based on the few parts of the budget they cherrypicked by when they were passed. If I wanted to cherrypick departments or programs, I could do that too. For example, the 2009 HHS budget was $562.8 Billion and has increased every year in years past. Assuming it doesn't go up another cent over the next 10 years then the HHS department would be responsible for $5.628 Trillion over the next 10 years. Just the past 5 years of the HHS budget has cost $2.538 Trillion, you can go back further to get a more accurate comparison but I know it will be higher than what the tax cuts cost.

That is just an example of how everything contributes to the deficit, you can do that with the military, national parks, the new health insurance or any other department or program in the budget. The Post just decided to pick 3 things out of the budget and say the tax cuts were the highest of the 3 they picked out.

Such a narrow view of the deficit is dangerous if anyone actually uses that as a means of addressing deficit reduction because it gives the illusion that if you just take care of those few things then everything will be just fine. It doesn't address areas of spending that could be reduced in other areas to prevent increased spending from creeping up on us again and putting us back in the same position. The issue is so much more complicated than a few areas of the budget. Cutting 10% of the net budget would provide well over $2 Trillion dollars over 10 years but I can't stare at the screen that long and don't have 65,000+ pages of paper to print it off nor the time to find where the best places are to make those cuts. The bottom line is that nobody wants to do all that work but I doubt that only 10% of all government spending is something we just can't live without.

-- Posted by McCook1 on Tue, Aug 3, 2010, at 1:43 PM

Mike,

I never said it wouldn't reduce the deficit but eliminating tax cuts is not cutting spending. You can only spend what the people give you. If you keep more of their money. You can't stop spending money you don't have. Granted, the net effect is the same but it's not cutting spending when you raise taxes, it's raising taxes and yes it is very simple.

I don't see anyone putting forward an actual plan yet, they're just talking as they have been for over 2 years. Obama said he would close Gitmo by the end of last year and that didn't happen so please forgive me if I don't put blind faith in his speeches. The time for talk is closely coming to a close with the need to pass something before the Bush tax cuts expire for everybody. It all goes back to the saying, "the proof is in the pudding".

-- Posted by McCook1 on Tue, Aug 3, 2010, at 11:42 AM

Yes McCook and if you allow the tax cuts to expire for the top 2% Americans that also cuts spending. As you said it's very simple.

You know for someone who routinely defends what the other side is doing you rarely hear anything they say and rarely see anything they do. It's very strange.

-- Posted by MichaelHendricks on Tue, Aug 3, 2010, at 11:09 AM

Wondering,

Anything that comes out of the budget contributes to the deficit including vacations for the President. A $2 pen contributes to the deficit because it comes out of the budget. If you cut spending then you can reduce the deficit. It's very simple.

Where did I ever give you the idea that George Bush was my hero? My heroes are all people I know personally and you have no idea who they are.

-- Posted by McCook1 on Tue, Aug 3, 2010, at 10:55 AM

Give us a break McCook1.

Obama's vacations adding to the deficit!

Not near as much as your hero W.

He has the record of most days of vacation by a sitting president.

Crawford TX trips, just a mear 77 trips there, for 490 days.

Camp David, 149 trips for just 487 days.

Not to mention all the fishing and golf trips on the side.

That is an average of 122.125 days of vacation per year, for the Crawford and Camp David trips!

-- Posted by goarmy67 on Tue, Aug 3, 2010, at 12:03 AM

Mike,

As I've also stated before, all we've heard of Obama's plan is rhetoric from his speeches but no details. The current income classifications don't have $200000 or $250,000 as a cutoff for different tax rates. That means the charts would need to be rewritten to show what the tay rate will be for the income levels in that range as opposed to the current range and that could be written in a number of ways, each with varying results.

If he's going to save people money in the lower income levels on their taxes over the Bush tax cuts as shown in that chart then you would need lower tax rates AND the corresponding income levels to make those figures accurate. I haven't seen those details from Obama and without them it's just speculation, not fact

To make a tax chart without those specific details is both misleading and irresponsible.

Eliminating the military would have the same effect on the deficit but Republicans wouldn't support that either because it would be foolish to do so. It would also be foolish to take more money from Americans during a recession when people are having such a hard time as it is. Many people have new jobs that pay less than they were making in their old jobs and Republicans realize this and would not support making things harder for those people. It is an election year and Democrats wouldn't dare trying that so you're right, it is a moot point.

I didn't hear what Sarah Palin had to say but she doesn't have a vote on this so that's a moot point to me.

The stimulus, healthcare and the President's vacations also contributed to the deficit. There's hardly anything that doesn't contribute to the deficit. We could do this all day for that very reason. It's also why cutting spending in various areas of the budget will bring down the deficit. Making a lopsided cut in only one area is simultaneously lazy and political and neither side is immune to that.

What do you think rich people do with that money? It doesn't go under their mattress. It goes into the economy by purchasing goods and services which provides jobs, investing in expanding or creating businesses which provide jobs or they invest it in financial institutions which increases their ability to lend. Without that money out there it goes to the government who can spend it on things like deficits which do not create jobs or thaw up the credit freeze. Creating jobs increases the tax base and revenue to government who can apply those new revenues to the deficit which means getting 2 birds with one stone.

-- Posted by McCook1 on Mon, Aug 2, 2010, at 11:27 PM

Well first off Obama campaigned and has continally said since being elected that he wanted to let the Bush tax cuts expire EXCEPT for those making under $250,000 which is exactly what the graph shows. The Democrats, for their part, are fully on board with that plan. So for you to say that you don't know of his proposal is either just not paying attention or purposely misleading.

Everyone's taxes would go up that is correct but the effect on the deficit would actually be something Republicans favor since they want to cut and letting ALL the tax cuts expire will do that. But since the Democrats aren't planning on doing that it's a mute point.

Just another few pointers. Sarah Palin has said the expiration of the taxes would cause a $3.8 trillion tax increase. She is a BIT off on this one. An extension of ALL the tax cuts would actually cost $3.1 trillion and just paying for the tax cuts that Obama is planning to let expire would $830 billion over 10 years.

That of course leads to the lie that John Kyl and Mitch McConnell recently tried to push and that was that the Bush tax cuts pay for themselves. They don't but like I have been saying the national Republicans never let silly little things like facts get in their way. Between 2001 and 2005 the tax cuts cost $539 billion while the projected cost of extending all tax cuts between now and 2018 is $3.28 trillion.

Funny all we have heard for the last two years were Republicans wanting to cut the deficit. It was their argument for every bill passed under Obama yet here comes their biggest chance to cut the deficit and now you don't hear them saying anything about it except to outright lie and claim the tax cuts will pay for themselves.

Then their is the claim that the tax cuts didn't lead to the deficit even though it accounted for 48% of the deficit.

Of course there is the larger reason the Republicans don't want any of the taxes to expire especially for the richest and that's the trickle-down theory. It has been proven not to work but that hasn't stopped Republicans pushing it.

-- Posted by MichaelHendricks on Mon, Aug 2, 2010, at 6:04 PM

Mike,

As I've stated before, if they don't act soon, the Bush tax cuts will expire and everyone's taxes will go up. Where has Obama posted his plan? The chart would only be accurate if he's mixing tax cuts with tax increases based on the class they're in. I haven't seen this proposal laid out by Obama or in either house in Congress.

-- Posted by McCook1 on Sun, Aug 1, 2010, at 11:54 PM

I know that this blog is about the Social Security myth but since the tax cuts are the bigger story right now I thought it was high time to bust the myth (outright lie, even) that several high ranking Republicans are pushing about ending the Bush Tax cuts.

I know that it has been mentioned on here before, so I thought this was interesting.

At the top of this blog you will see a graph of the tax cuts under Bush and the new taxes proposed by President Obama. As you can plainly see despite the rhetoric and propaganda out there everyone's taxes will NOT be going up. Not even a majority of taxes will be going up. In fact those earning less than 300,00 their taxes will actually go down.

This graph was published at the following {http://online.wsj.com/article/SB10001424052748704719104575389540592147682.html link}

The biggest lie circulating through Republican circles right now and it has been repeated several times by several different posters on this site is that Democrats are planning on ending all of President Bush's tax cuts. It's not true, it's not even remotely close to the truth, but with Republicans trying to win big in 2010 silly things like facts really have no place with them.

-- Posted by MichaelHendricks on Sun, Aug 1, 2010, at 1:43 PM

When I said "100% SS tax on all wage earners" I actually meant that SS tax on 100% of wages. I can see someone misinterpreting that one quite easily, that would be extreme. lol

-- Posted by McCook1 on Fri, Jul 30, 2010, at 7:48 PM

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"Raise the wage base from the present $106,800 base.

A tax increase yes, so what. Very few people around this area ever reach the limit. If they do, good for them, but most people pay SS taxes, on 100% of their wages, so why should some be treated differently?"

That was the post by Wondering and this was your response:

"I agree wondering, the easiest solution to fix the crisis, 27 years from now, is to raise the cut-off line."

Wondering said that if others are taxed on 100% then everyone should be and you agreed with him on that post.

I chose the $2 million because under Wondering's proposal that you agreed with, a person making $2 million would be taxed on 100%. The example I gave is how it will work if all wage earners are taxed on 100% of earnings. I think this is a very conservative number since there are a lot of people out there who make a lot more than that. Many CEOs make 10x that amount. It was based on a 100% SS tax on all wage earners and it's a pretty conservative example considering what some people make beyond the $2 million example I gave.

I haven't seen any good reason to raise the retirement age and raising the retirment age should be done based on retirement trends and longevity but not for monetary reasons. The fund should be able to fund itself at any retirement age if the funds going in, stay in until the beneficiary takes them out. Nobody should get out more than what they put in. If someone dies before receiving all their benefits then their benefits should go to their heirs. After all, this was supposed to be for retirement but it's operated like a retirement program. There's a lot to fix in it from a functionality standpoint and it is short because it pays out more in benefits to some and keeps the benefits of people who die before receiving all their benefits. In the private sector, a person who dies before receiving all the money in their account, can leave that money to their family or anyone else they want. If the one holding their money got their accounts so bad that they used that money to cover other accounts, that would be called fraud.

I don't have the perfect solution off the top of my head because the fund has been used as regular budgeting revenue when it was never intended for that but I do believe we can find a solution to fix that mistake, prevent it from happening again and move on.

-- Posted by McCook1 on Fri, Jul 30, 2010, at 7:45 PM

Has someone suggested raising it from $106,800 to %2 million because that seems to be an insanely amount of a raise. Unless you were just using those figures to make it seem worse than it actually was.

My question to you is do you support raising the retirement age?

-- Posted by MichaelHendricks on Fri, Jul 30, 2010, at 5:50 PM

Mike,

"The only way it becomes a wash is if suddenly at retirement everyone is getting more per check."

The rich who contribute beyond the base wage WILL receive larger checks because your check is based on what you put in. If you put in more then your check is going to be more.

You're increasing what comes in now but you're increasing what comes out down the road. The only way it's not a wash is if you're only looking at the effect of the revenue in the short term but not taking into account you're increased expenditures to pay it back in the long term. You've got to budget beyond the short term benifits of additional revenue and look ahead by budgeting for the larger checks that come out of the fund when they retire.

For example, if they only pay on the first $106,800 then their check at retirement, will be much smaller than what they will receive if they are paying on say $2 million. At $106,800 they will pay $6,621.60 every year to Social Security with interest accruing until their retirement. At $2 million, they will pay $124,000 every year with interest accruing every year on that larger amount until they retire. Since the amount you pay determines what you get back, they will receive much larger checks at retirement.

That will lead to rich people getting much larger checks from Social Security and it won't be long before people start complaining because the rich get way more money from Social Security than the guy who only contributed on his $50,000 salary. Rich people will receive millions more, at retirement, and people will think there is something wrong about this despite the fact that they are just getting back what they put in. Everyone should be treated equally under Social Security so if you want to tax all earnings then don't complain when the rich are getting enormous Social Security checks tax-free. Right now the amount of what they can get is capped because of the base wage so nobody has seen this happen but if it does, people's envy will set in, politicians will play on that envy and the money that is rightfully due to them will be in jeopardy from yet another angle.

-- Posted by McCook1 on Fri, Jul 30, 2010, at 5:05 PM

How do you figure that one McCook? There will be more money in Social Security that yes you will have to pay back but it is hardly a wash because you are increasing how much goes in. The only way it becomes a wash is if suddenly at retirement everyone is getting more per check. That's not what is being suggested.

-- Posted by MichaelHendricks on Fri, Jul 30, 2010, at 3:37 PM

From what I understand the easiest way to allow social security live on through the ages, is to stop allowing politicians to utilize the funds for there different process. Just allow the money to sit in a slew of accounts collecting interest.

-- Posted by Damu on Fri, Jul 30, 2010, at 3:16 PM

Wondering,

What you contribute determines what you receive back from social security. So, if you raise the wage base then you also increase the amount that those people will receive from social security since they are contributing more. What happens is you have more revenue on the front end but you also have more expenditures on the back end when they collect. At best, it would be a wash.

-- Posted by McCook1 on Fri, Jul 30, 2010, at 1:35 PM

Just an early announcement that my next blog will focus on the entire House Republicans and four Democrats who voted down a bill that would have paid health insurance for the workers that were at Ground Zero on 9/11. It takes a special kind of coward to stand behind political partisanship to vote down this bill.

-- Posted by MichaelHendricks on Fri, Jul 30, 2010, at 1:20 PM

I agree wondering, the easiest solution to fix the crisis, 27 years from now, is to raise the cut-off line. The idea that raising the retirement age is not a solution but a sly way for those who want to dismantle Social Security to cut more money from the fund.

Though I will say it is quite a turn around and absolutely hypocritical of those Republicans who were scaring senior citizens last year because they claimed that the health care bill would destroy Social Security, Medicaid, and Medicare are now the same Republicans wanting to gut if not eliminate those very same programs. I really hope people are paying attention to the Republican rhetoric because right now they are trying their hardest to talk out of both sides of their mouths.

-- Posted by MichaelHendricks on Fri, Jul 30, 2010, at 11:37 AM

Mike,

"All you have done is locked onto the most negative aspect, which right now is a reality, just to justify your last comment which is based on the idea that there is a crisis with Social Security."

What in the world are you talking about? I never said Social Security was in a crisis right now. I said it's better to fix it now and prevent it from becoming a crisis than it is to wait until it becomes a crisis and fix it. If it is only going to provide 75% benefits after 27 years then that is a problem that needs to be addressed sooner rather than later. If it was in great shape then it would be able to provide 100% benefits in perpetuity. That's how a program that is self-funded is supposed to work.

If nobody is going to retire after 27 years then I could see why nobody should worry about it but I highly doubt that happens. Therefore, we need to make sure the program is funded with 100% benefits for every year the program is in operation. I don't think it's asking too much to ask that we make plans to ensure that the program is in good shape well beyond the next 27 years. The main reason is simple too. It's because if it's not an immediate problem then government seldom addresses it until it becomes an immediate problem. In this case, the reasoning is that we have 27 years so why worry about it so much? The reason is because if it is not funding at continuosly funding at 100% then it's not operating like it should. Now, you can sit around and wait until it gets to be a problem but like I said earlier, I don't think that we should ignore it because it is temporarily funded at 100%.

Btw, when a nation issues treasury bonds to itself, it is indebting itself to itself. They wanted to take money out of Social Security and the interest on the bonds that is paid to Social Security is paid out of the regular budget just like all other debt. Therefore, the interest and bond redemptions we pay to social security out of the regular budget do contribute to the deficit just like every dollar of the regular budget does.

-- Posted by McCook1 on Fri, Jul 30, 2010, at 9:12 AM

A very simple solution to the so called problem

of Social Security going broke.

A simple solution that even Warren Buffet has proposed.

Raise the wage base from the present $106,800 base.

A tax increase yes, so what. Very few people around this area ever reach the limit. If they do, good for them, but most people pay SS taxes, on 100% of their wages, so why should some be treated differently?

-- Posted by goarmy67 on Thu, Jul 29, 2010, at 10:51 PM

Oh course your source is going to be criticized, but really, just because someone "composed" this supposed list of facts makes it fact? Who says?

And what exactly is the value a treasury bond if 30 years from now I want to retire after ALLL the money I put in over the years and the United States treasury has no real value?

What is the cost of our national debt that Obama can't seem to poke with a stick? Have you ever had credit card debt, and not only made a minimum payment, but made no payment at all, only went in further? With a promise like that, who could ever think the US treasury is going to have our damn money when we need it someday?

You're still drinking their Kool-Aid Mike. I'm sure if greedy Republicans had thought up Social Security you'd find a problem with it.

I wonder...is there a problem with our debt growing to 15 trillion dollars, or is that a myth too?

With all of our greedy politicians out there honoring themselves by sending pork packages back home, ripping through these slush funds for their extravagant lifestyles in Washington, and jetsetting all over the world on our dime, how the hell is anything ever going to be paid back?

I read where our greedy politicians went through over $600,000 on bottled water in 9 months last year. When you make $160,000 a year plus much more, why can't you buy your own damn water? Does the plumbing in Washington not work? Can they not pour water into a pitcher and then fill their glasses with it? What about all the polution in the water? What about the Pacific Garbage Patch that is a worse evironment disaster than the Gulf Oil spill ever thought of being because unlike oil, the Earth cannot process poly plastics naturally and it just sits there and pollutes forever.

I thought these thugs you're defending were environmental saviors! I thought that's why they wanted to passs massive taxes on us so WE would stop polluting the Earth. Or is that money just so they can buy more expensive bottled water, and fly around the world on global warming research missions with their families to tropical islands all on tax payers money?

-- Posted by Justin76 on Thu, Jul 29, 2010, at 10:31 PM

So the whole notion that it will last another 27 at least with absolutely no changes confused you? Again, Social Security is not broke so really changes need to be made. I don't understand your comment. There are going to be changes and if they are simple minded realistic changes there will never be any issues with Social Security.

All you have done is locked onto the most negative aspect, which right now is a reality, just to justify your last comment which is based on the idea that there is a crisis with Social Security. There isn't. That's the over riding myth to this whole thing is that Social Security is in a crisis. It simply is not.

-- Posted by MichaelHendricks on Thu, Jul 29, 2010, at 8:31 PM

I don't plan to retire in 27 years so I think the sooner it is fixed, the better. If it was not in need of fixing then it would be able to fund at 100% at any given year. It's better to never be known for preventing a crisis than it is to be long remembered for having to fix a crisis.

-- Posted by McCook1 on Thu, Jul 29, 2010, at 7:29 PM


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