Re: the future long term financial apocalypse of the USA

On 13 May 2024 23:19:35 -0000, kludge@panix.com (Scott Dorsey) wrote:

Scott Lurndal <slp53@pacbell.net> wrote:

>
Today, in the USA, income taxes are as low as they've been since, well,
perhaps before WW2.    The decreases in revenue due to tax cuts
began in 1981 and were seriously cut in 2016, leading in a large
part to the current deficits.

>
Indeed, although it should be pointed out that this is most dramatic at
the higher levels, where the highest tax rates have been capped long ago.
>
However, it should be pointed out that although reductions in tax rates
were not combined with increases in productivity like Mr. Reagan
predicted and this has increased the deficit a lot... the actual source of
much of that initial deficit comes from overspending on the War on Vietnam.

This is an interesting
page:<https://www.investopedia.com/us-national-debt-by-year-7499291>

1980 $  908 (billions, rounded)
1988 $2,602 (billions, rounded)

which is not what I have been led to believe, but it still tripled
under Reagan.

This is, of course, ignoring inflation.

The pension age hasn't increased but once (from 65 to 67) since
the social security system was created.

>
The Social Security system is supposed to be kept independent from the
general budget and so Social Security witholding isn't supposed to be
a tax.  Unfortunately due to some fiddling with the budget in the eighties,
it has become that way.  Fixing this should be a priority, and without
fixing it, it can be hard to figure out what the real deficit is.

The only way to fix it for for Congress to /pay the money back/ to
Social Security. Since neither Party appears willing to do /that/, the
remaining solutions will all turn out to be unacceptable, so far as I
can tell.

"Unacceptable" here means that /the voters won't like them/. And
riled-up voters are a force to be, if not reckoned with, at least
appeased.

The hyperbole about getting shot is so ridiculous that it's not
even worth responding.

>
I dunno.  I got shot on the street minding my own business.  Mind you, it
was by a police officer, so that might not be quite what the original
poster was thinking.
>

If the social security fund had been invested, rather than being
used to cover tax cuts and overspending, it would be sufficient to
support future retirements without any modifications.

>
Bingo.
>

The disappearance of private pensions by corporations starting
in the late 1980s, also has put pressure on the social security
system - a freebee for the corporations - push retirement costs
completely on the government, leading to more and more arcane
mechanisms to enrich wallstreet (401k, IRA, Roth IRA, etc)
without necessarily providing sure income to the recipients.

>
Yes.  The Social Security program was intended to be a safety net
in order to cover people who fell between the cracks.  It was not
intended to be a universal pension but when it got to the point
where the country needed a universal pension, it became one.

Alternately, since pretty much everyone contributed to it (or at least
was supposed to be doing so) and would eventually draw it, it
inevitably became a part of Retirement Planning, affecting any other
parts (penstions, IRAs/401(k)s, etc) by reducing how much income they
had to produce.

Sort of like of Earned Income Credit supports not paying adequate
wages because the gummint makes up (some) of the difference.

For a brief period, I "chased refunds" (as we called it) for the IRS.
I encountered people whose entire year was based on working for, to be
fair, most of the year and then get their EIC-enhanced refund and live
on that for a few months. They were /very/ unhappy when a glitch
occurred and the refund was delayed.

And, no, they weren't schoolteachers.
--
"Here lies the Tuscan poet Aretino,
Who evil spoke of everyone but God,
Giving as his excuse, 'I never knew him.'"