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A Proposed Solution For Social Security Insolvency

 
 
Reply Sun 3 Jul, 2016 09:53 am
This may sound odd coming from a libertarian but If we have decided that it is societies's obligation to financially care for the elderly, why don't we stop pretending it is being paid for by the recipients and do the following:

Instead of selling Tresury Bonds to pay for the deficit in SS spending (and adding to the national debt) why not simply 'print' the money for SS and not count it against the debt?

Classical economists would say this would be inflationary but in the current macro economic environment I don't think that would be the case. The money is not a disincentive to work because the recipients are not working anyway.

In addition to not increasing the national debt, this solution would tend to reduce the large gap in wealth between rich and poor. The bonds sold to individuals to cover the deficit are largely bought by the uber wealthy. The interest on them makes them even wealthier and adds to the national debt even further.

This same solution might be applicable to Medicare as well.

Any of you armchair economists see problems with this solution?
 
chai2
 
  2  
Reply Sun 3 Jul, 2016 10:24 am
@Leadfoot,
How are you going to differenciate between SS printed money and general money?

You can't.

This printed money to be put out there for social security recipients will be used in the general marketplace by the recipients.

edgarblythe
 
  3  
Reply Sun 3 Jul, 2016 12:54 pm
It can be paid for honestly. We just need a government with a modicum of integrity on the job. They waste vast sums on bad causes and act all frugal on important social issues.
cicerone imposter
 
  1  
Reply Sun 3 Jul, 2016 04:27 pm
@Leadfoot,
As edgar said, it's not a matter of printing more money. It's about over whelming waste by the government, and not acting on legislation that can sustain social security and medicare.
The government needs to consider the increasing longevity and the slowing down of birth rates relative to the seniors collecting benefits.
0 Replies
 
CalamityJane
 
  2  
Reply Sun 3 Jul, 2016 10:06 pm
All the government needs to do is not touch the money that is paid for by us with our Social Security taxes. That would eliminate any further measures.
cicerone imposter
 
  1  
Reply Sun 3 Jul, 2016 10:13 pm
@CalamityJane,
http://time.com/money/3967821/social-security-trust-fund-2034/
CalamityJane
 
  2  
Reply Sun 3 Jul, 2016 10:30 pm
@cicerone imposter,
The surplus Social Security will run out in 2034. If SS taxes are increased
we won't have a problem. Higher earners need to pay more taxes, period. So far they've gotten off the hook for just about everything tax related. Fill the loopholes of high end earners and corporate America.
Leadfoot
 
  1  
Reply Mon 4 Jul, 2016 08:46 am
@chai2,
Quote:
How are you going to differenciate between SS printed money and general money?
printing money is a figure of speech in this use.
99+ % of 'money' ends up as bits set in a computer memory, so yes, it will be the same as all money and will end up in the general economy.

Keansian fans would applaud this.
Leadfoot
 
  1  
Reply Mon 4 Jul, 2016 08:53 am
@edgarblythe,
Quote:
It can be paid for honestly. We just need a government with a modicum of integrity on the job. They waste vast sums on bad causes and act all frugal on important social issues.

It could, but I see no hope of a government with real integrity. The measure I suggested would eliminate one source of government misuse of SS. Currently the government uses ALL SS collected money for the general fund, there is no SS trust fund, it contains nothing but IOUs paid for by selling T Bonds. That adds to the national debt and the portion of government spending going to interest.
Leadfoot
 
  1  
Reply Mon 4 Jul, 2016 08:57 am
@CalamityJane,
Quote:
All the government needs to do is not touch the money that is paid for by us with our Social Security taxes. That would eliminate any further measures.
As I told Edgar, it's too late for that, there is no account that has that SS money in it. It was spent long ago.

Even if that 'money' actually existed, it will run out in the foreseeable future. Think someone already posted that date.
0 Replies
 
Leadfoot
 
  1  
Reply Mon 4 Jul, 2016 09:08 am
@CalamityJane,
Quote:
The surplus Social Security will run out in 2034. If SS taxes are increasedwe won't have a problem.

Higher earners need to pay more taxes, period. So far they've gotten off the hook for just about everything tax related. Fill the loopholes of high end earners and corporate America.

A tax reform that included higher taxes on the rich would inevitably include new loopholes and the rich are very good at finding loopholes that the legislators never thought of.

The real gorilla in the room is Medicare and Medicaid. If you fix both SS and them with higher taxes, there would be a massive increase in people changing their citizenship and other measure. There is already a movement in that direction by the uber rich. Squeeze the balloon in one place and it just pops up somewhere else.

I was hoping for more posts on why my solution would cause other problems. What is its fatal flaw? So far I can't think of any.
0 Replies
 
chai2
 
  1  
Reply Mon 4 Jul, 2016 09:26 am
@Leadfoot,
Leadfoot wrote:

Quote:
How are you going to differenciate between SS printed money and general money?
printing money is a figure of speech in this use.
99+ % of 'money' ends up as bits set in a computer memory, so yes, it will be the same as all money and will end up in the general economy.



Printing more money would just increase inflation, and could lead to hyperinflation.

Simply printing more money results in devalued money. It's not worth as much, or anything. Other countries would not want to loan us money as we would be paying them back with devalued money.

It's not a matter if it's an incentive to work or not, in the big picture it's how how our "let's just print money" will be valued by the world.

Figure of speech? I thought that's what your whole argument was based on, printing money to be distributed only to social security receipients.

Why not just print money to pay off other stuff too? Because of the above.
Why not just print enough money to pay off everything we owe? Why just social security? (she asked facetiously )
Leadfoot
 
  1  
Reply Mon 4 Jul, 2016 09:56 am
@chai2,
Quote:
Why not just print money to pay off other stuff too? Because of the above.
Why not just print enough money to pay off everything we owe? Why just social security? (she asked facetiously )

The inflation argument is a good one and that is why I limited it to SS in my initial solution. It has to be limited to things that we decide that are society's obligation to the old or disabled.

Printing money for everything would result in what we see now in places like Venezuela. That is definitely Not part of my proposal.

But just because printing money for everything is disastrous doesn't mean it would not work in this limited application. Are you aware that we have been printing massive amounts of money? The trillion dollar deficits used to pay for the bank bailouts and several wars has (surprisingly) not caused rampant inflation. I won't say no inflation because it has, but it's been manageable.

I think the impact on inflation by my proposed fix would be much less than the inflation caused by the deficit spending of 2008 - 2016.
chai2
 
  1  
Reply Mon 4 Jul, 2016 10:33 am
@Leadfoot,
Leadfoot wrote:


I think the impact on inflation by my proposed fix ...


Where is your evidence of this? Or is it just what you think, as opposed to what has happened in other countries over the years.

You can't propose this "just" for social security because it would immediately spill over into other areas as the money is spent, loaned etc in the bigger environment.

How are you proposing that the effect would remain just for social security?

How are you proposing that other countries will not see our money as even somewhat devalued because we are just printing it?
edgarblythe
 
  1  
Reply Mon 4 Jul, 2016 10:42 am
@Leadfoot,
Leadfoot wrote:

Quote:
It can be paid for honestly. We just need a government with a modicum of integrity on the job. They waste vast sums on bad causes and act all frugal on important social issues.

It could, but I see no hope of a government with real integrity. The measure I suggested would eliminate one source of government misuse of SS. Currently the government uses ALL SS collected money for the general fund, there is no SS trust fund, it contains nothing but IOUs paid for by selling T Bonds. That adds to the national debt and the portion of government spending going to interest.

In my opinion, you might as well use Monopoly money, and save the cost of printing some, because nobody on Earth would honor it anyway.
Leadfoot
 
  1  
Reply Mon 4 Jul, 2016 11:09 am
@chai2,
Quote:
Leadfoot quote:
"I think the impact on inflation by my proposed fix ..."


Where is your evidence of this? Or is it just what you think, as opposed to what has happened in other countries over the years.

I gave you the evidence before. Has the much larger deficit spending (which is printing money) for the bank bailout and several wars caused the inflation you fear? If not, why should the much smaller amount I proposed cause it!

Quote:
You can't propose this "just" for social security because it would immediately spill over into other areas as the money is spent, loaned etc in the bigger environment.

As I said before, we ARE doing it now for SS, Medicare and Medicaid. But now we are also increasing the national debt and the amount of budget spent on interest which is mainly going to the uber rich. My proposal reduces the debt and reduces the disparity between rich and poor (a little).
Leadfoot
 
  1  
Reply Mon 4 Jul, 2016 11:19 am
@edgarblythe,
Quote:
In my opinion, you might as well use Monopoly money, and save the cost of printing some, because nobody on Earth would honor it anyway.

My point is, it's virtually already Monopoly money. It is only worth something because of the faith in the ability of the economy and technology in the US to keep up with the printing presses.
0 Replies
 
edgarblythe
 
  1  
Reply Mon 4 Jul, 2016 11:56 am
The only solution is to elect somebody that cares enough to do the right thing.
Leadfoot
 
  1  
Reply Mon 4 Jul, 2016 12:20 pm
@edgarblythe,
Does that mean I can count on your vote for Mr. Johnson? Mr. Green
edgarblythe
 
  1  
Reply Mon 4 Jul, 2016 12:31 pm
@Leadfoot,
I don't know which Johnson you refer to. Right now they are cutting into SS in ways most people either don't recognize or else shy away from fighting. Once they make a major change that hurts too much to abide, it will become a public issue politicians cannot ignore.
 

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