Income Inequality, Brought To You By Social Security & Medicare
Taking from the young and giving to the old -- and rich.
Hunter Lewis blogs at AgainstCronyCapitalism.com:
...These taxes hit low income young people and transfer the money to affluent seniors. This is all part of what we have previously described as the current " war against the young."We are not Republicans on this site. We find crony capitalism in all parties. But if we were Republicans, and facing an Obama campaign completely premised on attacking the rich, we would propose to keep tax rates where they are but end entitlements for rich people.
The biggest entitlement is being able to deduct jumbo home mortgages. Ending this would not be easy because the real estate industry would threaten a shut off of campaign funds. But it makes no sense to subsidize expensive homes when the government is hemorraging red ink.
While they are at it, the Republicans should end Social Security and Medicare for the wealthy.
All this old vs young, young vs old, it's just to divide us against one another and blame one another, when in fact the main thief is the government and the cronies stealing all our money. They're dividing us against one another, having us blame one another, so that we don't notice while they continue to help themselves to our money.
Lobster at December 3, 2011 1:07 AM
The correct answer is to end all entitlements. Nobody is entitled to my money, or any money that they (or their families) didn't earn themselves.
By saying, "end entitlements for rich people," you're opening yourself up to the discussion of when a person is rich. Drawing a line in the sand is difficult on that issue.
Is a person rich if they
-- own a home
-- have an income above x amount
-- have assets totaling more than x amount
-- own stocks/bonds
-- have a trust
There isn't a definitive answer, and the answer could change easily. 60 years ago, we could have said that any family that owned more than one t.v. was rich, but had that become a point of legislation, no one would ever buy more than one t.v., and then no-one would be rich, right?
Any legislated amount of, "richness," would have the same effect, if not to the same degree. If anyone who earns more than $250,000 per year during their working life is considered rich, and ineligible to collect social security, but still has to pay into social security, at least some people will stop seeking jobs that pay more than that $250,000 arbitrary number.
End all entitlements, then no one has a chance to try and game the system.
Jazzhands at December 3, 2011 7:31 AM
Time to rethink the breast-beating about that pepper-spray incident - turns out the students had surrounded and threatened the police beforehand.
So much for the "unprovoked attack on innocent protesters" meme.
Link to Accuracy in Media:
http://www.aim.org/aim-column/new-video-proof-of-media-lies-about-uc-davis-protests/
Ben David at December 3, 2011 8:31 AM
Amy Alkon
http://www.advicegoddess.com/archives/2011/12/03/income_inequali.html#comment-2825412">comment from Ben DavidBen David, you consistently, rudely, post off-topic here. If you'd like a blog of your own, get one through blogspot.
The police were not "threatened" by the seated, unmoving protesters that they peppersprayed (the subject of my post), and I find the partisanship of some of those who are against OWS in trying to say this rather disgusting. By the way, I'm not an OWSer, but I'm also not for excessive force on seated, nonviolent protesters.
If you want to discuss the OWS movement, go down to that entry and do it. Don't try to turn the discussion on other posts to your personal agenda.
On a bright note, your usual seething homophobia isn't part of this particular off-topic comment.
Amy Alkon at December 3, 2011 8:57 AM
Social security was represented as a savings and insurance plan, ever since it was established.
"These taxes hit low income young people and transfer the money to affluent seniors"...the affluent seniors mostly WERE relatively-low-income young people once, and paid the SS taxes on the belief, inculcated by the government, that they would be getting it back.
The real problem is that once the money was in the government's hands, it was not invested or even saved---it was spent, and a high % of it was flat-out wasted.
Lobster said "All this old vs young, young vs old, it's just to divide us against one another and blame one another"....absolutely. The nature of leftism is to turn groups within a society against each other. It ends in a neo-Hobbesian was of group against group and either in the disintegration of the society or in the establishment of an authoritarian government.
david foster at December 3, 2011 9:07 AM
I like government tax policies that benefit me directly. I dislike government tax policies that don't benefit me directly. For now, I *like* the tax rates on my dividends - the lowest in my lifetime - and want them to go lower. I *like* paying my mortgage's interest with my before-tax income. This is my self-interest, and I'm indifferent to its effects on others.
Andre Friedmann at December 3, 2011 9:47 AM
"While they are at it, the Republicans should end Social Security and Medicare for the wealthy."
No, they should be advocating the end of both but that would hurt their senior voters the same as it can and has hurt Dems.
Anyway, as Jazz mentioned above it becomes a game of who is what and what do they deserve to get, even if they've been paying into the system themselves. Its not a savings plan, its a tax that steals from peter to pay paul.
Sio at December 3, 2011 11:26 AM
"While they are at it, the Republicans should end Social Security and Medicare for the wealthy."
I'm starting to think that won't work. A lot of people who are in middle age now are seeing huge negative returns on their 401k's, and their homes have lost significant value. Cutting of those benefits to the wealthy isn't going to make much difference unless "wealthy" is defined to mean about 80% of the population.
Cousin Dave at December 3, 2011 11:26 AM
In his books that I've read, Pete Peterson (who, along with with former Senators Warren Rudman and Paul Tsongas, organized the bi-partisan Concord Coalition in 1992) has said that the original intent of Social Security was to provide financial assistance only to those elderly people who needed it but that Roosevelt and his advisors decided against means-testing it for two reasons: (1) they didn't want elderly people receiving it to have the stigma of receiving "welfare" (if all, or most, elderly people received it, it could be called "insurance"), and (2) they reasoned that providing financial assistance only to the most poor elderly would make the program more politically vulnerable; the more people who benefit from it, the more people who have an interest in preserving the system.
Jim at December 3, 2011 11:31 AM
This part annoyed me: "But it makes no sense to subsidize expensive homes when the government is hemorraging red ink."
The phrasing suggests that if we weren't in such massive debt, then subsidizing expensive homes would make sense.
No, it doesn't. If you have your sites on an expensive house, you pay for it without help from the government.
Patrick at December 3, 2011 12:14 PM
Hunter Lewis, you're an idiot.
Because, just as with every other such policy recommendation, your idiocy makes it more difficult to get and keep wealth. Not to mention penalizing lenders.
We can loan lots of money to people who are good risks, and encourage them to build big houses and employ lots of people. What a radical concept! It must be stopped!
The key here, though, is that money is not kept by those who have not learned how to use it.
Those, in fact, are the poor. The best money advice I've ever seen on late-night TV was wheezed by some old guy who got on there and said, "Do you want to be rich? Then, look at what the poor people do - and don't do that!"
You're not changing why people are poor by changing rules, because those who are fit to handle money will always outwit those who are not. Period.
The same group of asses will make it difficult to inherit wealth, too, because that helps fuel class warfare.
Radwaste at December 3, 2011 12:43 PM
Hm. Now I'm wondering...
How many kids named "Hunter" are out there being raised to be living irony?
Radwaste at December 4, 2011 8:55 AM
The real problem is that once the money was in the government's hands, it was not invested or even saved---it was spen
Not entirely true. The investment was US Treasury bills. Full faith and credit, you know? Don't know what sort of interest rate that gives.
I'm sure it wasn't very much.
I R A Darth Aggie at December 4, 2011 9:56 AM
Actually, Darth Aggie, you can find out exactly how much interest Treasuries paid for whatever date you like:
http://research.stlouisfed.org/fred2/
(Granted, you would need to know what maturities they were invested in to get a precise answer.)
And a note--T-bills, strictly speaking, are only the shortest-term Treasury securities. Medium-term are notes, long-term are bonds. "Treasuries" is the generic term for all of them. (In my work, we often use the rates on these as reference data, so I'm a stickler for precision there.)
silverpie at December 4, 2011 10:15 AM
It's my understanding that the Treasuries that the SS trust fund invests in are a special non-interest-bearing issue. When they mature, the trust fund just rolls them over.
Cousin Dave at December 4, 2011 1:34 PM
Upon further review, they are not the same Treasuries the rest of us buy, but they do bear interest based on those.
http://www.ssa.gov/oact/progdata/intRates.html
silverpie at December 5, 2011 5:20 AM
@radwaste
"Do you want to be rich? Then, look at what the poor people do - and don't do that!"
this is a good advice. But it has a few problems in itself. First you need to be in contact of poor people to know how they fuck up. I do have a few ideas, but not sure if that is a complete set.
So then come the biggest problem: between poor and rich there is middle-class (and actually melting). I'd say the advice tell you how to get to the middle-class, not to the rich.
You don't do the idiotic things, you work relatively hard, and so I agree you are most likely safe, but not rich! Or at least you are rich of your freedom (invaluable).
nico@hou at December 5, 2011 7:57 PM
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