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March 23rd, 2005, 05:04 PM
Trustees Issue New Forecasts
For Social Security, Medicare

Associated Press
March 23, 2005 4:49 p.m.

WASHINGTON -- The trust fund for Social Security will go broke in 2041, a year earlier than previously estimated, the trustees reported Wednesday. Trustees also said that Medicare, the giant health-care program for the elderly and disabled, faces insolvency in 2020.

The new projections made in the trustees annual report were certain to be cited by both sides in the massive battle to overhaul Social Security, which President Bush has made the top domestic priority of his second term.
The go-broke date for Medicare was a year later than the estimate that trustees gave a year ago.

The insolvency dates represent when both trust funds will have exhausted the government bonds that have been building up to take care of the pending retirement of 78 million baby boomers.

However, the more important dates are when Social Security and Medicare begin paying out more in benefits than they are receiving in taxes because that represents the time the government must start redeeming the bonds in the trust fund. To do that, the government will have to increase its borrowing on financial markets, raise taxes or divert money from other government programs.

For Medicare, the threshold when benefits exceed program income occurred last year. For Social Security, that threshold will be crossed in 2017, one year earlier than the 2018 date projected in last year's report. That change is certain to be cited by the administration as a sign of the urgency to act to deal with Social Security's funding woes. Democrats argue that the real crisis is in Medicare and that the administration is ignoring the health-care crisis.

Treasury Secretary John Snow, chairman of the six-member board of trustees for both programs, said the estimates "leave no question that Social Security reform is needed and it is needed soon. Reform of this system, for the sake of our children, grandchildren and the financial future of our country, is a very real and pressing matter."

However, Democratic critics drew different findings from the report, arguing that it showed that Social Security was not in a crisis situation and did not require the private accounts that the administration wants to establish for younger workers.

"Today's report confirms that the so-called Social Security crisis exists in only one place -- the minds of Republicans," said Senate Democratic Leader Harry Reid of Nevada. "In reality, the program is on solid ground for decades to come."

Rep.Sander Levin (D., Mich.) said that Mr. Bush "started this discussion off on the wrong foot by insisting on diverting trillions of dollars from Social Security to private accounts. ... This report offers the opportunity to remove private accounts from the table so we can come up with a thoughtful, bipartisan solution that will protect Social Security for generations to come."

The trustees said that Social Security's unfunded obligations total $4 trillion over the next 75 years, an increase from last year's projection of $3.7 trillion in unfunded liabilities. Mr. Snow said that to meet that shortfall, Social Security payroll taxes would have to be raised by 3.5 percentage points or benefits would have to be cut by 22%.

Mr. Bush has said he will not raise payroll taxes to deal with the funding problem although he has left the door open to raising the $90,000 cap on incomes subject to the payroll tax.

In the report, the trustees said that "the projected trust fund deficits should be addressed in timely way to allow for a gradual phasing of the necessary changes and to provide advanced notices to workers. The sooner adjustments are made, the smaller and less abrupt they will have to be."

The six-member board of trustees is headed by Mr. Snow and also includes Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt and Social Security Commissioner Jo Anne Barnhart. In addition, there are two public trustees, Thomas Saving of Texas and John L. Palmer of New York.

Copyright © 2005 Associated Press

March 23rd, 2005, 05:09 PM
The trust fund for Social Security will go broke in 2041, a year earlier than previously estimated, the trustees reported Wednesday. Trustees also said that Medicare, the giant health-care program for the elderly and disabled, faces insolvency in 2020.

However, Democratic critics drew different findings from the report, arguing that it showed that Social Security was not in a crisis situation and did not require the private accounts that the administration wants to establish for younger workers.

"Today's report confirms that the so-called Social Security crisis exists in only one place -- the minds of Republicans," said Senate Democratic Leader Harry Reid of Nevada. "In reality, the program is on solid ground for decades to come."

This is what boils my blood the most about this debate... the democrats are acknowleging that there is a problem, yet since there is time until it becomes a crisis, say that it can be put off. Can someone explain to me why it shouldn't be fixed sooner rather than later (aside from the obvious that democrats want it fixed under an administration of theirs... it was FDR after all who created social security).

March 23rd, 2005, 05:34 PM
The problem with your argument is that the kinks in the Social Security system have been exaggerated. Bush's plan to privatize it is the equivalent of demolishing a house that only needs a minor renovation. And yes politics is part of it, but why not? Republicans have always been against Social Security (they voted against it's creation, and the expansion of the program to the disabled). People on the far right to this day revile FDR and see him a some evil Socialist who destroyed their Gilded Age paradise. Their "plan" is nothing more than a covert way of phasing out a program that most Americans support. BTW, they've been shouting "crisis" for decades. When Bush campaigned unsuccessfully for a Congressional seat in 1978, he told people that Social Security would be bankrupt by 1988! And guess what...he suggested privatization back then too!

March 23rd, 2005, 06:01 PM
I guess to make this debate a lively one, I should first state my biases:

1. I am a republican
2. I am in favor of social security
3. I am opposed to private funds, we have 401k's for a reason
4. I feel that raising the retirement age should be seriously looked at as a solution.

In response to your previous statement about Bush....there was an ammendment to social security in 1983 raising the retirement age among other changes, so while he was probably exaggerating the situation, he was right that there was a problem then.

March 23rd, 2005, 06:45 PM
Well at least we can agree that privatization isn't needed. There were some problems with the program in the early '80s but there was no need then to phaseout the system, just as there is no need to do so now. At least in 1983, Reagan was unwilling to actually destroy Social Security, and he worked with Democrats in Congress to hammer out a plan.
As for changes to the system, the retirement age is an option, but an unpopular one that will probably not get approved since seniors are a powerful voting bloc. Also, keep in mind that after the Baby Boomers retire and a good number of them die off, Generation Xers will retire, but when they do there will be more workers (Generation Y and so forth) and Social Security will correct itself. And in 2042 Social Security will start to cut benefits (although about 70% will still be given), but it will not go broke. With privatization you lose guarunteed benefits and in return you are told that the market will make up the lost money, which is like being left to fight off wolves with a butter knife.

March 23rd, 2005, 06:53 PM
With lifespans rapidly approaching and probably soon to exceed 80, I see no reason why someone under 55 shouldn't have their retiriement age upped to 70, someone under 45 to 75, and someone under 35 to 80. FYI, i'm in the last category. I don't know the complex nature of population projections, but how does this sound as a starting point.

Social Security is more for the lower to lower middle class than anyone else, since in today's upper middle to upper class society we have our 401k's, 403b's, IRA's and any number of other accounts. I know that I personally don't even take social security into account when planning my life in 50 years (well 54 years if my plan from above is enacted).

March 23rd, 2005, 07:45 PM
Well that is Social Security's whole purpose. It isn't supposed to be something that you build a middle class lifestyle on, but it is a basic safety net which has worked well for its recipients for the past 70 years. I'm not shut to the idea, but there are other ways to keep Social Security from slahing benefits. Raising the payroll cap from $90,000 to $100,000 or $120,000 would go a long way, and Bush has claimed that he is open to the idea. However, his goal is a bait and switch. If he can get the Dems to say that they're in favor of it, he'll do an about face and at the same time accuse them of wanting to raise taxes...and then ride that horse to victory in the 2006 congressional elections. He did this in 2002 when he first opposed the Dept. of Homeland Security's creation, suddenly supported it, and then railed against congressional Democrats for arguing with him over a provision involving labor rights of DHS employees. The net result was a GOP takeover of the Senate.

March 24th, 2005, 10:55 PM
March 24, 2005
About That Number

The Social Security trustees issued their annual report yesterday and said that by one measure, the shortfall in Social Security's finances jumped from $10.4 trillion last year to about $11 trillion this year. Eleven trillion dollars! The trustees, in service to President Bush's alarmist warnings about the need to do something drastic about Social Security, are dishing up some misleading numbers.

It's bad enough that the trustees began some of their calculations with that $10.4 trillion figure. It's arrived at by projecting the system's shortfall over infinity, rather than the usual 75-year time frame - as if the system's finances 10,000 years from now are a legitimate policy concern. Moreover, no less an authority than the American Academy of Actuaries is already on record debunking infinite projections as conveying "little if any useful information about the program's long-range finances" and "likely to mislead anyone lacking technical expertise ... into believing that the program is in far worse financial condition than is actually indicated."

Compounding the subterfuge is that the difference between this year's $11 trillion eyepopper and last year's number - $600 billion - is being used as evidence of a scary deterioration in Social Security's finances. That's just wrong. The two monster numbers are actually the same quantity - different ways of expressing an unchanging level of debt at two different points in time. If you owe someone $1,000 in 10 years, for instance, you could retire the debt now with $500, or next year with $530. Your level of debt doesn't change, just the time point.

Some people who interpret the numbers as a deterioration appear to be confused. But others, like President Bush, are being deliberately alarmist. Mr. Bush's persistent misstatements on Social Security leave little doubt that he wants Americans to believe that the system is irretrievably broken so that they will buy into his unnecessary privatization plan.

Fortunately, the unpoliticized numbers in yesterday's report are not overly dire. Using a 75-year time horizon, the trustees project that the system will be able to pay full benefits until 2041, at which time it will be able to pay 74 percent of the promised benefits, falling to 68 percent by 2079. That works out to a gap of $4 trillion, which could be bridged with modest tax increases and benefit cuts, phased in over the next few decades. If people try to tell you different, they need to be set straight.


March 25th, 2005, 10:12 AM
I personally prefer to read both the NY Times and the Wall St. Journal to get the whole story, since one is to the left in their thought process and the other is to the right. So with that in mind...

New Wrinkle on Social Security
'Progressive Indexing'
May Help Bush
Broker a Compromise

March 17, 2005; Page A4

WASHINGTON -- President Bush declared he is "making progress" in selling Americans on revamping Social Security, though there is no legislative movement evident in Congress nearly two months after he proposed it.

The president spoke yesterday at a news conference intended to reassure wavering Republicans of his commitment to tackling Social Security. He also raised a new possibility for compromise with Democrats by calling attention to "progressive indexing," a term referring to changing the way benefits are calculated so as to slow benefit growth for more affluent seniors while leaving low-income seniors unaffected.

Mr. Bush called reporters to the White House amid some negative polls about his top domestic priority, which is to create private Social Security accounts while reducing future benefits to assure the program's solvency. Members of Congress, who have taken no action on the issue, are about to head home for a two-week Easter recess, some of them braced for repeats of the constituent protests against changing Social Security that marked last month's break.

"I urge the members...when they go home, to talk to their constituents not only about the problem, but about solutions," said Mr. Bush, who heads to Florida tomorrow and to Arizona, Colorado and New Mexico next week. Acknowledging that "personal accounts do not solve the issue," he for the first time promoted a cost-cutting idea that would reduce future retirement benefits by amounts linked to workers' income, with the lowest-income Americans seeing no change.

As in his State of the Union address -- when he sought to paper over Democrats' solid opposition by alluding to other benefit-reduction ideas as the work of individual Democrats -- Mr. Bush yesterday invoked a proposal advanced by former Fidelity Management & Research Co. President Robert Pozen and identified him as "a Democrat economist." Mr. Pozen had been invited to the White House a day earlier to brief Bush economic adviser Allan Hubbard on his proposal for "progressive indexing" of retirees' initial Social Security benefits.

Currently, workers' initial retirement benefits are calculated based on their average career earnings, adjusted for wage growth in the economy; in later years, retirees' benefits rise with inflation. To cut costs, the White House has been considering indexing initial benefits to inflation as well, since prices generally rise slower than wages. But the change would greatly reduce initial benefits in time, and the idea has fallen flat in Congress.

Under Mr. Pozen's progressive-indexing idea, those in the bottom 30% of income earners would continue to have initial benefits tied to wage growth; those in the top 30% would have benefits tied to price growth. Those with incomes in between would have benefits indexed to a graduated mix of price-and-wage indexing.

Republican Sens. Robert Bennett of Utah and Lindsey Graham of South Carolina are supportive of Mr. Pozen's idea in plans they are promoting as alternatives to Mr. Bush's proposal. A White House official suggested it could "jump-start" the Social Security debate when "everyone is trying to write the obituary."

While Mr. Bush has proposed in detail how workers should be able to carve private accounts from Social Security payroll taxes, he affirmed yesterday that he won't be sending Congress actual legislation that would include cost-saving changes in Social Security benefits that would draw fire. "The first bill on the Hill is always dead on arrival," the president said.

For now, the House and Senate seem frozen over who will go first. House Republican leaders yesterday held an event to dramatize their willingness to "modernize" Social Security, posing around an automobile from 1935 -- the year Social Security became law. But they have no legislation in hand and are insisting the Senate go first -- so House members won't have to cast a contentious vote, only to see the issue die in the Senate before next year's elections.

In the Senate, no action is scheduled in the Finance Committee, which handles Social Security, and Chairman Charles Grassley of Iowa isn't writing any legislation. "Now's the time to build up a dialogue among senators, Republicans and Democrats," he said yesterday. But he added that Congress should "act in the next eight or nine months."

The only bill-drafting so far is the free-lancing of Republican Sens. Bennett, Graham, Chuck Hagel of Nebraska and, most recently, Orrin Hatch of Utah. Yesterday, Mr. Hatch proposed personal accounts outside of Social Security: Workers could contribute as much as $5,000 a year, and the government would match contributions up to $1,000 and pay more to those who agree to delay drawing traditional Social Security benefits by five or 10 years beyond normal retirement age.

To pay for all this and shore up Social Security's finances, Mr. Hatch said he was intrigued by Mr. Pozen's proposal for reducing initial benefits and also would link the Social Security retirement age to rising life expectancy. "My first choice would be the same as the president's -- that is, we borrow it," Mr. Hatch said at a business forum. But he acknowledged that wouldn't get Senate support. "As a last resort," he added, he would consider increasing the cap on wages subject to payroll taxes. The White House has left the door open to that, as well.

--Brody Mullins contributed to this article.

Write to Jackie Calmes at jackie.calmes@wsj.com

March 25th, 2005, 02:29 PM
I like the idea of Progressive Indexing, since it would make the system more efficient, but as long as Bush calls for privatization he's not going to get anywhere with compromising. What's REALLY interesting is that his surrogates are already running ads attacking the Democrats for "not having a plan" when in reallity the burden of proof lies in Bush's hands, AND Bush is also trying to have things both ways. If he's really "open to all ideas" then why did he give details on privatization in his State of the Union address? Why does he keep harping on privatization when at the same time, he says that "all options are on the table?" It's politics, pure and simple. If the Democrats release any sort of plan first, then Bush and his supporters in the media (especially Fox) will shift the overall debate on the issue to how awful their plan is. Another scenario could be that Bush actually takes privatization off the table, tries to co-opt a Democratic proposal and declare political victory (he did that with the Homeland Security Dept's creation, the establishment of the 9/11 Commission, and the signing of the McCain-Feingold act...all of these things he strongly opposed until he saw the way the wind was blowing.) The Democrats should do to Bush with privatization, the same thing that Republicans did to Clinton's 1993 healthcare proposal: kill it. If the proposal is going to hurt the American public, then it should be stopped without any compromise.

April 5th, 2005, 12:36 PM

April 5, 2005

Illegal Immigrants Are Bolstering Social Security With Billions

By EDUARDO PORTER (http://query.nytimes.com/search/query?ppds=bylL&v1=EDUARDO PORTER&fdq=19960101&td=sysdate&sort=newest&ac=EDUARDO PORTER&inline=nyt-per)

http://graphics8.nytimes.com/images/dropcap/s.gifTOCKTON, Calif. - Since illegally crossing the Mexican border into the United States six years ago, Ángel Martínez has done backbreaking work, harvesting asparagus, pruning grapevines and picking the ripe fruit. More recently, he has also washed trucks, often working as much as 70 hours a week, earning $8.50 to $12.75 an hour.

Not surprisingly, Mr. Martínez, 28, has not given much thought to Social Security's long-term financial problems. But Mr. Martínez - who comes from the state of Oaxaca in southern Mexico and hiked for two days through the desert to enter the United States near Tecate, some 20 miles east of Tijuana - contributes more than most Americans to the solvency of the nation's public retirement system.

Last year, Mr. Martínez paid about $2,000 toward Social Security and $450 for Medicare through payroll taxes withheld from his wages. Yet unlike most Americans, who will receive some form of a public pension in retirement and will be eligible for Medicare as soon as they turn 65, Mr. Martínez is not entitled to benefits.

He belongs to a big club. As the debate over Social Security heats up, the estimated seven million or so illegal immigrant workers in the United States are now providing the system with a subsidy of as much as $7 billion a year.

While it has been evident for years that illegal immigrants pay a variety of taxes, the extent of their contributions to Social Security is striking: the money added up to about 10 percent of last year's surplus - the difference between what the system currently receives in payroll taxes and what it doles out in pension benefits. Moreover, the money paid by illegal workers and their employers is factored into all the Social Security Administration's projections.

Illegal immigration, Marcelo Suárez-Orozco, co-director of immigration studies at New York University, noted sardonically, could provide "the fastest way to shore up the long-term finances of Social Security."

It is impossible to know exactly how many illegal immigrant workers pay taxes. But according to specialists, most of them do. Since 1986, when the Immigration Reform and Control Act set penalties for employers who knowingly hire illegal immigrants, most such workers have been forced to buy fake ID's to get a job.

Currently available for about $150 on street corners in just about any immigrant neighborhood in California, a typical fake ID package includes a green card and a Social Security card. It provides cover for employers, who, if asked, can plausibly assert that they believe all their workers are legal. It also means that workers must be paid by the book - with payroll tax deductions.

IRCA, as the immigration act is known, did little to deter employers from hiring illegal immigrants or to discourage them from working. But for Social Security's finances, it was a great piece of legislation.

Starting in the late 1980's, the Social Security Administration received a flood of W-2 earnings reports with incorrect - sometimes simply fictitious - Social Security numbers. It stashed them in what it calls the "earnings suspense file" in the hope that someday it would figure out whom they belonged to.

The file has been mushrooming ever since: $189 billion worth of wages ended up recorded in the suspense file over the 1990's, two and a half times the amount of the 1980's.

In the current decade, the file is growing, on average, by more than $50 billion a year, generating $6 billion to $7 billion in Social Security tax revenue and about $1.5 billion in Medicare taxes.

In 2002 alone, the last year with figures released by the Social Security Administration, nine million W-2's with incorrect Social Security numbers landed in the suspense file, accounting for $56 billion in earnings, or about 1.5 percent of total reported wages.

Social Security officials do not know what fraction of the suspense file corresponds to the earnings of illegal immigrants. But they suspect that the portion is significant.

"Our assumption is that about three-quarters of other-than-legal immigrants pay payroll taxes," said Stephen C. Goss, Social Security's chief actuary, using the agency's term for illegal immigration.

Other researchers say illegal immigrants are the main contributors to the suspense file. "Illegal immigrants account for the vast majority of the suspense file," said Nick Theodore, the director of the Center for Urban Economic Development at the University of Illinois at Chicago. "Especially its growth over the 1990's, as more and more undocumented immigrants entered the work force."

Using data from the Census Bureau's current population survey, Steven Camarota, director of research at the Center for Immigration Studies, an advocacy group in Washington that favors more limits on immigration, estimated that 3.8 million households headed by illegal immigrants generated $6.4 billion in Social Security taxes in 2002.

A comparative handful of former illegal immigrant workers who have obtained legal residence have been able to accredit their previous earnings to their new legal Social Security numbers. Mr. Camarota is among those opposed to granting a broad amnesty to illegal immigrants, arguing that, among other things, they might claim Social Security benefits and put further financial stress on the system.

The mismatched W-2's fit like a glove on illegal immigrants' known geographic distribution and the patchwork of jobs they typically hold. An audit found that more than half of the 100 employers filing the most earnings reports with false Social Security numbers from 1997 through 2001 came from just three states: California, Texas and Illinois. According to an analysis by the Government Accountability Office, about 17 percent of the businesses with inaccurate W-2's were restaurants, 10 percent were construction companies and 7 percent were farm operations.

Most immigration helps Social Security's finances, because new immigrants tend to be of working age and contribute more than they take from the system. A simulation by Social Security's actuaries found that if net immigration ran at 1.3 million a year instead of the 900,000 in their central assumption, the system's 75-year funding gap would narrow to 1.67 percent of total payroll, from 1.92 percent - savings that come out to half a trillion dollars, valued in today's money.

Illegal immigrants help even more because they will never collect benefits. According to Mr. Goss, without the flow of payroll taxes from wages in the suspense file, the system's long-term funding hole over 75 years would be 10 percent deeper.

Yet to immigrants, the lack of retirement benefits is just part of the package of hardship they took on when they decided to make the trek north. Tying vines in a vineyard some 30 miles north of Stockton, Florencio Tapia, 20, from Guerrero, along Mexico's Pacific coast, has no idea what the money being withheld from his paycheck is for. "I haven't asked," Mr. Tapia said.

For illegal immigrants, Social Security numbers are simply a tool needed to work on this side of the border. Retirement does not enter the picture.

"There will be a moment when I won't be able to continue working," Mr. Martínez acknowledges. "But that's many years off."

Mario Avalos, a naturalized Nicaraguan immigrant who prepares income tax returns for many workers in the area, including immigrants without legal papers, observes that many older workers return home to Mexico. "Among my clients," he said, "I can't recall anybody over 60 without papers."

No doubt most illegal immigrants would prefer to avoid Social Security altogether. As part of its efforts to properly assign the growing pile of unassigned wages, Social Security sends about 130,000 letters a year to employers with large numbers of mismatched pay statements.

Though not an intended consequence of these so-called no-match letters, in many cases employers who get them dismiss the workers affected. Or the workers - fearing that immigration authorities might be on their trail - just leave.

Last February, for instance, discrepancies in Social Security numbers put an end to the job of Minerva Ortega, 25, from Zacatecas, in northern Mexico, who worked in the cheese department at a warehouse for Mike Campbell & Associates, a distributor for Trader Joe's, a popular discount food retailer with a large operation in California.

The company asked dozens of workers to prove that they had cleared up or were in the process of clearing up the "discrepancy between the information on our payroll related to your employment and the S.S.A.'s records." Most could not.

Ms. Ortega said about 150 workers lost their jobs. In a statement, Mike Campbell said that it did not fire any of the workers, but Robert Camarena, a company official, acknowledged that many left.

Ms. Ortega is now looking for work again. She does not want to go back to the fields, so she is holding out for a better-paid factory job. Whatever work she finds, though, she intends to go on the payroll with the same Social Security number she has now, a number that will not jibe with federal records.

With this number, she will continue paying taxes. Last year she paid about $1,200 in Social Security taxes, matched by her employer, on an income of $19,000.

She will never see the money again, she realizes, but at least she will have a job in the United States.

"I don't pay much attention," Ms. Ortega said. "I know I don't get any benefit."

Copyright 2005 (http://www.nytimes.com/ref/membercenter/help/copyright.html) The New York Times Company (http://www.nytco.com/)

Ninja Mantis
April 9th, 2005, 06:20 AM
Well at least we can agree that privatization isn't needed. There were some problems with the program in the early '80s but there was no need then to phaseout the system, just as there is no need to do so now. At least in 1983, Reagan was unwilling to actually destroy Social Security, and he worked with Democrats in Congress to hammer out a plan.
As for changes to the system, the retirement age is an option, but an unpopular one that will probably not get approved since seniors are a powerful voting bloc. Also, keep in mind that after the Baby Boomers retire and a good number of them die off, Generation Xers will retire, but when they do there will be more workers (Generation Y and so forth) and Social Security will correct itself. And in 2042 Social Security will start to cut benefits (although about 70% will still be given), but it will not go broke. With privatization you lose guarunteed benefits and in return you are told that the market will make up the lost money, which is like being left to fight off wolves with a butter knife.

Well said Tom.

I hate that we're so polarized these days under Bush. Why do a democrat or republican have to be at odds over a program that benefits more people than it inconveniences? I can understand that rich people don't want to pay into a system they don't need but because they were able to be rich in America, they too have an obligation to the social welfare of the nation. Take away the extravagant Bush tax cuts that benefit a minority of Americans most and Social Security's problems would fade away quickly.

Also consider that illegal aliens who come to the US and work, have social security taxes taken from their pay...and THEY will never see any of those benefits since they're here illegally. According to a story I read in the NY Times recently, illegal aliens account for a substantial contribution to SS.

I'm not advocating for illegals but noticing that our gov'ts priorities are out of whack. We can spend zillions on defense contracts that destroy and provoke terrorism...but we can't invest tax payer money on the tax payers?

FDR's instituting the New Deal...saved America from a possible revolution in a time of depression. Creating a social safety net really kept the poor majority from realizing the inequities of wealth distribution in this country.

Civilized nations have nationalized health care, free education, dental, you name it. But they pay higher taxes. But...they actually GET something for their tax dollar. What do we get? Millions have no health care. Education cost a prohibitive fortune and we invaded of a nation that was no threat to us. Halliburton, Bechtel, Texaco and Unocal get to make a fortune on the decisions of their cronies who run the country?

Capitalism is a great system...when it operates with laws designed to keep things fair. Corrupt Capitalism does not do right by the majority of people. Social Security is a small price to pay to prevent a sleeping majority from rising up and starting a socialist movement to replace a Capitalist system that too often leaves too many out of the loop of success. Everyone can't be a baron. But everyone should have basic necessities addressed with the tax dollars spent to run our gov't, not just the fat cats.

April 9th, 2005, 12:39 PM
I've been thinking long and hard about this issue since opening this thread and have a couple of different angles both pro and con that keep popping up.

First off, social security helps the poor to a much higher degree than the wealthy. That's easily demonstrated by the fact that it has a cap on benefits which will allow the poor to see almost no degredation in their income post-retirement, but the wealthy will never be able to live off of it. However my prior feelings on raising the retirement age will simply hurt the poor, since they will most likely be the ones to die at a younger age leaving the wealthy to benefit from the money.

Secondly, illegal immigrants shouldn't benefit from our systems equally to those who legally entered the country. It is extremely difficult to legally immigrate to this country, and those who successfully accomplish this task should be rewarded for doing so. To simply give benefits to the illegals would harm those who did it the right way.

Thirdly, we still live in a capitalist society where hard work does pay off. Granted there are the priveleged few who will never have a want in their lives, and the system shouldn't take them into account at all (save for having their taxes enter into the mix). For everyone else, there is no barrier to rising to the top if you are smart about your career and work to achieving your goals.

Fourthly, New York will get screwed by any system that uses blanket statements like income brackets as a gauge of wealth. Last time I checked, $100,000 doesn't go quite as far here as it does in say Nebraska (or even Maryland for that matter)

Any thoughts on these points? I'm really at a loss to the answers.

April 9th, 2005, 06:02 PM
I agree with you on your first statement, since many poor people don't live as long, due especially to the lack of healthcare, but that's another subject altogether. Your point about needing to work hard enough to become wealthy is a given in a capitalist society, but many people work their asses off for years only to lose the fruits of their labor to recession or medical bills or rising cost of living. In a sucessful mixed economy, government and business need to operate with a system of checks and balances similar to that of The President, Congress, and Supreme Court. When one entity is acting abusive towards the other, that entity must be restrained. If Enron is cheating people by cooking the books, then there needs to be more government action, but if the government is causing a stagnant economy, then there must be a modest shift towards the lassiez-faire direction to counteract that.