Filed under: Economy
Andrew Sullivan agrees with me:
Dylan Matthews balances Social Security’s balance sheet by lifting the contribution cap:
Currently, wages over a certain yearly total ($106,800 this year) are exempted from Social Security payroll taxes. Medicare’s payroll tax has no such cap. This has raised the question of how raising the cap could extend Social Security’s solvency….Congressional Research Service looked at this question in 2008 by evaluating three different proposals. The first would raise the cap so that 90 percent of wages are taxed (CRS estimates this would mean a cap of $171,600 in 2006) and pay higher benefits to those affected; the second would eliminate the cap and pay higher benefits; and the third would eliminate the cap for taxes but would not increase benefits…
While all proposals put a dent in the shortfall, completely eliminating the cap without increasing benefits actually creates a long-term surplus, and eliminating the cap while increasing benefits comes close. The nature of Social Security as a social insurance, rather than welfare, program suggests that the latter proposal may be more palatable, as it retains the connection between what wage-earners pay into Social Security and what they get out of it.
This is basically a big new tax on the rich. But it is also the closing of a silly loophole. In an ideal world, it would be unnecessary. Now, this reform, or something like it, seems to me to be essential.
Filed under: Economy
A video making the rounds at work:
“The Millennial Commission” by Hilary Doe and Lucas Puente, published on The Huffington Post:
f you believe the stereotype that Millennials, members of the generation born between 1978 and 2000, are indifferent to issues of social insurance — Social Security, Medicare, Medicaid, etc. — Congress’s recent conversations should change your mind. Even if you imagined that young people across the country were not personally touched by or invested in the support that social insurance provides, you must recognize that the proposed Deficit Commission, intended to decrease the national debt by making cuts outside the democratic process, could serve as a rallying cry — an impetus for the largest-ever generation of Americans to demand a voice in the debate. Before Social Security or Medicare are targeted and slashed as part of the undemocratic commission’s “solution” to our growing fiscal debt, Millennials must be given the opportunity to weigh in. That is because we are engaged in these issues, we are prepared to contribute our perspective, and, most importantly, we are capable of designing the society that we would like to inherit.
It Goes Beyond Debt: Insuring Our Present and Our Future
As many have previously noted, the Millennial Generation is unique. We are interconnected, socially conscious, and innovative. We desire community, hold a holistic view of the world, and value progress. The Social Insurance programs taking the brunt of criticism by deficit hawks in DC have shaped our society since the Social Security Act’s passage in1935. If they are to change, reforms should be informed by these values, and not simply by a goal of deficit reduction. A country’s social insurance programs should be reflective of the citizens they serve. Therefore, instead of simply worrying about passing debt to future generations, Congress must consider the society that young Americans desire to live in when considering reform.
Millennials recognize the benefits of social insurance. We are beneficiaries of Medicaid benefits. We recognize the important role that Social Security and Medicare can play in our future. We aspire to self-employment and identify ourselves as entrepreneurs–an aspiration made less risky by a strong social safety net.
Additionally, Social Security already supports Millennials nationwide. For example, millions of young Americans are being raised by their grandparents. For many, the income received from social security makes this possible. Additionally, Social Security provides financial support to the families of children whose parents are disabled or deceased. In total, Social Security removes 1.3 million children from poverty every year and improves the impoverished conditions of 1.5 million others. Even Temporary Assistance for Needy Families (TANF) reaches less than half of the number of children whose conditions are improved via Social Security. As a generation, we must recognize that both our present and our future are directly affected by the existence, strength, and breadth of the American social safety net.
A recent report by the Center for American Progress and Demos confirms the Millennial Generation’s support of strong social insurance programs in America. Millennials favor increased government spending to stabilize Social Security, with 66% of 18 to 29 year-olds in support, compared with 52% of those over 60. Similarly, the number of young adults favoring more government support for Americans’ retirement stands at 69%, up from 56% in 1996 and 53% in 1985.
Let Us Design the Society that We Will Inherit
The Millennial generation’s support for Social Security does not imply, however, that we are not concerned about the level of debt that we will inherit. We are not ignorant of the cuts or revenue-raising measures that will need to be taken to ensure the solvency of any program that we intend to support. We are concerned. We are conscious of the difficult decisions that need to be made, and, we must be included in these important conversations. In fact, the aforementioned values and attitudes that define our generation–innovation, social consciousness, and interconnectedness–imply a unique potential for Millennials to design a system that is fresh, transformative, responsible, and reflective of those people that it supports. We can imagine reform efforts that pay heed to reality and look outside the box to redesign our social safety net.
So, while we appreciate Congress’s efforts to reel in the national debt, an undemocratic process that compromises social insurance without input from the citizens that it supports is not the answer. Failing to include the perspective of Millennials, the generation that stands to be impacted more than any other at the table, would represent a tremendous missed opportunity. Most importantly, by not engaging the Millennial generation on issues of social insurance, we fail to consult a generation of Americans equipped with powerful ideas capable of balancing our budget and reinvigorating social insurance for decades to come. That is something this country simply cannot afford.
Elizabeth Chiles Shelburne argues:
Anyone who lives in West Hartford or is looking to buy a house in West Hartford, could tell you that the main draw to this lovely town if ours is the great schools. People are willing to take out huge mortgages and pay well above the average for homes in West Hartford because it means they don’t necessarily have to send their children to area private schools.
The cost of education as part of the cost of a home, not necessarily any economist or politician’s first thought when it comes to the housing bubble and the subprime crisis, but one that should definitely be considered:
Education There’s a lot of focus on the interest rate deduction that is embedded inside a mortgage. I think the most obvious embedded option inside a mortgage that isn’t discussed is the option to educate your children at the local school district. If sending 3 kids to a private high school at your old houses costs $5,000/year, and if the new house’s public high school is free and equally good then taking a $60,000 bath on the house is break-even. Completely rational.
The value of this option has increased, both with the returns to education but also with a general worry about the robustness of our educational meritocracy. The amount of money and energy that goes into securing access to high-end education has skyrocketed over the past decade, and part of that budget, though it isn’t treated as such, is in your house. And though we often think of educational inequality as a function of a Kozol-narrative of the poorest against the richest, this bidding may be most driven by inequality between the middle and the highest parts of the inequality curve. I’d really like to see some hard research into how much our desire to educate our children in the best way possible has driven subprime and the housing bubble.
Is this what you want your party to stand for?
The list of things wrong with these posters is just too long to write out.
But seriously, Republican Party – do you think “Tea Parties” = anti-war protests? Seriously? Think again.
Oh and on that note, this is nothing compared to European protests – nice try though.
So we all know that being in college is like living in a bubble. Now, studying abroad while in college is like a completely different bubble – no cares in the world and all of your savings spent seeing the sights in your city and going on trips around the world.
But what happens when you come out of this bubble? Or in my case, what happens on April 25th when I fly from London Heathrow to Logan International? Scratch that, what happens on May 1 when I return home to West Hartford via Greyhound bus?
The world that I will return to. The world in which I will spend my 4 months of summer and then the rest of my college life in, is completely different than the world I am currently living in here in London.
The big worry is the economy. Now we all know that the Dow closed at 6,800 today – something that not even Steph, Alex, or I could have predicted even when the stock market first started to fall during 1st semester. Further, according to Dad – houses all over West Hartford are up for sale, mostly because of the fact that people have lost their jobs and can no longer afford a West Hartford mortgage or West Hartford property taxes. To put this in perspective – my parent’s bought our West Hartford house at the beginnings of the housing boom in WeHa, we’ve only seen our property values increase over the 7 years that we’ve lived there, not decrease. Additionally, what happens if Target decides not to hire its usual numbers of summer help? That means I won’t have an income this summer – although I will have a job as an unpaid intern. And to take that a step further, what happens if I can’t get a job in Boston during the school year? That means no income and dipping into my post-grad savings, taking away my ability to lease an apartment in D.C. upon graduation.
Now, I know that I personally don’t have it as bad as other people my age. For my part at least, I have 6 more years of school when you count grad school. Now, it’ll put me in a lot of debt, but it will also allow for the economy to recover sufficiently so that it won’t be as difficult to find a good job.
But then again things could all change in an instant. I know that if either of my parents lose their jobs, affording to send me and Aaron to college together over the next 6 years would be really hard on them. I’d either have to take out loans for BU and for grad school, or just slim down the grad school plan altogether and not get my JD so that I can help my parents pay for Aaron and Adam.
This economic crisis is hitting everyone hard. We can only hope that something is done fast to prevent things from getting too much worse.
Filed under: Economy
… at least the GOP thinks so.
Can prayer’s save the economy?
South Carolina’s governor is offering prayers instead of stimulus funds to his state:
On C-SPAN’s Washington Journal this morning, Sanford received a call from a Charleston resident who said he lost his job because he has been taking care of mother and sister, both of whom have serious illnesses. The caller told Sanford he is “wrong” to decline the money. “A lot of people in South Carolina are hurting. And if this money can come and help us out we need it.” In response, Sanford could offer him only his prayer.
Dumb. Plain stupid. Forget the whole part that the federal government is actually throwing money at your state Gov. Sandford – free money – just take it, like an allowance. But just forget that. Remember the people that actually need the money. The one’s who are losing their jobs and their insurance. Unable to put their kids through school, get food on the table, buy clothes, pay the mortgage. Yeah, remember them? Don’t they deserve a little bit more than prayers? Yeah, think about that for a second. Then try again.